FedEx’s 2Q Earning Drop 30%
FedEx Corp. said Thursday its second-quarter profit fell 30% to $345 million, or $1.10 per share, from $493 million, or $1.58, a year ago.
The earnings were in line with a recent company projection. Revenue for the fiscal quarter ended Nov. 30 fell 10% to $8.6 billion.
Less-than-truckload unit FedEx Freight posted an operating loss of $12 million, compared with operating income of $32 million a year ago, while revenue fell 11% to $1.07 billion.
LTL yield fell 12% “due to the continuing effects of a competitive pricing environment and lower fuel surcharges,” FedEx said, adding that average daily LTL shipments increased 3% year over year, while growth rates improved month over month throughout the quarter.
Its FedEx Ground unit’s operating income rose 12% to $238 million, while revenue rose 3% to $1.84 billion.
The FedEx Express segment’s operating income fell 36% to $345 million, while revenue fell 13% to $5.3 billion.
Although it sees economic recovery next year, FedEx said “there is some uncertainty regarding the sustainability of current demand trends after our peak shipping season,” and predicted it would earn 50 to 70 cents per share in its third quarter.
For its full fiscal year, FedEx projected it would earn $3.45 to $3.75 per share, higher than analysts’ estimates of $3.46, the Associated Press reported. FedEx said continued cost cuts would boost its results.
FedEx Corp. is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
