Tuesday, September 2nd19.3°C
22817
22952

FedEx profit and revenue rise but not enough to meet Wall Street forecasts

DALLAS - FedEx Corp. says its latest quarterly profit rose 5 per cent from a year ago despite storms that raised the company's costs, but the results were below analysts' expectations.

The company's ground-shipping segment is doing better, but the express-delivery business is flat and customers continue to shift to slower, cheaper services for international shipments.

The package-delivery giant said Wednesday that net income in the quarter that ended Feb. 28 rose to $378 million, or $1.23 per share, from $361 million, or $1.13 per share, a year ago. Analysts surveyed by FactSet expected $1.45 per share.

Revenue rose 3 per cent to $11.30 billion from $11 billion, missing Wall Street's forecast of $11.43 billion.

The weak results drove FedEx to lower its forecast of full-year earnings. However, FedEx expects fiscal fourth-quarter earnings of between $2.25 and $2.50 per share, which leaves room to beat analysts' prediction of $2.34 per share.

FedEx said that weather reduced operating income by $125 million in the December-to-February third quarter. Snow, ice and freezing temperatures slowed the company's trucks and planes and raised costs for everything from de-icing to overtime. Shipments dropped off during storms because some retail shippers in the East and Midwest closed.

Rival United Parcel Service Co. struggled to keep up with peak volumes just before Christmas — traffic was heavier and later in the season than UPS expected.

FedEx Chairman and CEO Fred Smith said that his company handled December loads but will be careful in managing residential e-commerce shipments.

"The biggest challenge is the fact that so much of the business comes in such a short period of time, and obviously it is not possible to make these enormous capital investments for two or three weeks out of the year," Smith said on a conference call with analysts. "You can clearly go broke trying to deliver non-compensatory packages into people's homes."

Customers are limiting spending on higher-priced services. FedEx said that it was continuing to see a shift toward less profitable international services — the volume of international economy-class shipments rose 8 per cent.

The Memphis, Tenn.-based company is still buying back its own stock, which reduced the number of shares by 3 per cent from a year ago and boosted earnings per share.

Helane Becker, an analyst at Cowen and Co., said that investors would "give the company some slack" for the disappointing third quarter because of the slightly upbeat forecast for the May quarter and FedEx's moves to boost profit in its big express operations.

FedEx shares rose 56 cents to $139.13 in morning trading Wednesday. They began the day down 3.6 per cent for this year after gaining 57 per cent in 2013.

The Canadian Press


Read more Business News

22253


Recent Trending




Today's Market
S&P TSX15606.88-18.851
S&P CDNX1012.98-11.01
DJIA17053.24-45.21
Nasdaq4591.031+10.759
S&P 5002000.27-3.10
CDN Dollar0.9157-0.0037
Gold1287.40-3.30
Oil95.96+1.29
Lumber350.40+2.00
Natural Gas4.116+0.014

 
Okanagan Companies
Pacific Safety0.20+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.18-0.01
Cantex0.08+0.01
Anavex Life Sciences0.2425-0.0075
Metalex Ventures0.07-0.005
Russel Metals36.44-0.04
Copper Mountain Mining2.91-0.02
Colorado Resources0.165-0.015
ReliaBrand Inc0.0801-0.0199
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.225-0.02

 



22689

FEATURED Property
187478114752 Oyama Road, Lake Country, BC
5 bedrooms 5 baths
$1,999,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Manage your behaviour

You can’t manage what you can’t control! You can’t manage the number of sales you’re going to make but you can manage the behaviour that will help you make those sales. Obvious...


At the Core: Lessons in pricing from Apple

Apple has taught many entrepreneurs the importance of design, how to create buzz when introducing new products to the marketplace, how to pioneer new technology and the importance of superior quality....


New Real Estate Brokerage in town

Move over “big guys” there’s a new brokerage in town featuring local expertise, long standing experience and a fresh boutique approach. Kelowna, August 31 2014 – You may have...

_








Member of BC Press Council