FedEx 1Q earnings fall 53 percent
FedEx 1Q earnings fall 53 percent; says profit will remain weak through end of
year
Published on Thursday September 17, 2009, 8:20 am EDT
NEW YORK (AP) -- FedEx Corp. said Thursday its first-quarter earnings fell 53
percent -- matching its prediction released last week -- and warned its profit
will remain weak through at least the end of the year.
But the world's second largest package delivery company, considered a
bellwether of economic health, said it does see signs of improvement in the
economy.
The Memphis, Tenn.-based company reported earnings of $181 million, or 58 cents
per share, compared with $384 million, or $1.23 per share, a year ago.
Revenue fell 20 percent to about $8 billion.
Analysts predicted profit of 58 cents per share on revenue of $8.24 billion.
The company said its sales are continuing to be hurt by the slow economy, as
people ship slower and less often. The quarter was also hurt by lower fuel
surcharges -- the fees it passes on to customers based on the price of fuel.
But FedEx said it was able to offset some of the shortfall by "vigilantly"
cutting costs. Volume in International Priority -- its most lucrative segment
-- was also better than expected.
FedEx Corp. reiterated its profit prediction of 65 to 90 cents per share for
the second quarter ending in November. That's down from $1.23 a year ago.
It also said it will raise express shipping rates by 5.9 percent in January.
