FedEx Reports Higher Earnings; Cuts Forecast
FedEx Corp. Thursday reported a higher first-quarter profit from a year ago, but cut its full-year forecast by 4% due to overall economic volatility and high energy costs.
Net income for the quarter ended Aug. 31 rose to $494 million or $1.58 a share, from $475 million or $1.53 a year earlier, the company said. Revenue rose 8% to $9.2 billion.
“While the economy is growing at a moderate pace, recent financial market volatility and high energy costs have increased the uncertainty surrounding the near-term economic outlook, and weakness in the housing sector continues,” Chief Financial Officer Alan Graf said.
“As a result of this weaker than anticipated economic environment, particularly its impact on the LTL freight market, we have reduced our earnings forecast by 4% for the full year,” he said in a statement.
FedEx had projected it would earn $1.45 to $1.60 per share for the fiscal first quarter, and the company said its second-quarter earnings would be $1.60 to $1.75 per share, compared with $1.64 a year ago.
For the full fiscal year, FedEx said would earn $6.70 to $7.10 per share, down from a previous forecast of $7 to $7.40.
Operating income at its less-than-truckload FedEx Freight unit dropped 30% to $105 million, while revenue rose 22% to $1.23 billion. Shipments rose 13% due to the acquisition of Watkins Motor Lines last year, now rebranded as FedEx National LTL.
Operating income at the FedEx Ground segment rose 19% to $190 million, while revenue gained 14% to $1.62 billion.
FedEx Express’ operating income rose 9% to $519 million, while revenue rose 4% to $5.89 billion.
FedEx Corp. is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
