By Dhirendra Tripathi
Investing.com – FedEx (NYSE:FDX) shares were down 4% in Friday’s premarket trading as the company’s outlook for the ongoing fiscal year came in below the Street’s estimate.
It forecast fiscal 2022 earnings per share of $18.90 to $19.90, lower than the average estimate of $20.37, according to Refinitiv data.
FedEx founder and CEO Fred Smith told analysts that operations at the company are being crimped by an inability to find enough workers.
Companies in the U.S. have had to hike wages to attract labor for meeting booming consumer demand but many are still complaining of not enough workers being available.
Widespread labor shortages are hitting FedEx in the form of "higher wage rates and lower productivity, particularly in the (current fiscal) first quarter, and this is reflected in our overall outlook for the year," Chief Financial Officer Mike Lenz said in a call to analysts, Reuters reported.
FedEx was recently forced to suspend its freight shipping guarantees for roughly 1,400 customers to help relieve pressure on its network - which has been running at near full tilt for much of the pandemic. This was mostly owing to labor shortage.
Staffing challenges "contributed to recent service levels that do not meet our own high expectations," Chief Operating Officer Raj Subramaniam said in the call to analysts.