FedEx’s 1Q Profit Slips 22%; Express Unit to Boost Rate 4.9%
FedEx Corp. said Thursday its fiscal first-quarter profit slipped 22% from a year ago on higher fuel costs and declining demand for express shipments, and said its express unit will boost rates by a net 4.9% next year.
First-quarter profit fell to $384 million, or $1.23 a share, from $491 million, or $1.58, a year ago, FedEx said in a statement.
Revenue for the quarter ended Aug. 31 rose 8% to $9.97 billion, FedEx said in a statement. It had reported a $241 million loss for the previous quarter.
Meanwhile, the company’s FedEx Express unit will raise rates by a net 4.9% next year — an average increase of 6.9% for U.S. and U.S. export services, offset by a 2% reduction in fuel surcharges.
The increase will take effect Jan. 5, and FedEx Ground’s rate increase will be announced later this year, FedEx said.
Operating income at less-than-truckload unit FedEx Freight fell 15% to $89 million, while revenue rose 10% to $1.35 billion. LTL shipments gained 4%.
Operating income at the FedEx Ground segment rose 3% to $196 million, while revenue rose 9% to $1.76 billion.
FedEx Express’ operating income plunged 34% to $345 million, while revenue gained 9% to $6.42 billion.
FedEx said its second-quarter earnings would be $1.40 to $1.60 per share, compared with $1.54 a year ago.
For the full year, it reaffirmed its estimate of $4.75 to $5.25 per share, citing “weaker global macroeconomic conditions.”
FedEx Corp. is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
