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FedEx Profit Slips on Weather, Slow Economy
MEMPHIS,
Tenn. (March 07) – FedEx Corp. on Wednesday said a slowing economy,
severe winter storms and lower fuel surcharges contributed to a 2
percent decline in its fiscal third-quarter profit.For the quarter
ended Feb. 28, earnings slipped to $420 million, or $1.35 per share,
from $428 million, or $1.38 per share, in the year-ago period.
Complications due to storms hurt profit by 6 cents per share in the
recent period, but was offset by a gain of 8 cents a share related to a
lower tax rate.Revenue increased 7 percent to $8.59 billion from $8
billion a year earlier on stronger sales from its express, ground and
freight businesses. FedEx Kinko’s, the company’s document services
chain, saw sales fall 3 percent.Operating expenses jumped 9 percent to
about $8 billion, which led to reduced operating margins in the recent
quarter.On average, analysts polled by Thomson Financial expected the
company to earn $1.33 per share on slightly higher sales of $8.7
billion. The earnings estimates typically exclude onetime items.The
company maintained its long-term goal for earnings per share growth of
10 percent to 15 percent per year. However, FedEx warned growth may
fall short of that target in fiscal 2008 due to slower economic growth
and planned investments in the business.FedEx forecast earnings between
$1.93 and $2.08 per share for the fourth quarter. The company expects
fiscal 2007 profit to range from $6.45 to $6.60 per share, or between
$6.70 and $6.85 per share excluding one-time charges.On average,
analysts are predicting fourth-quarter profit of $2.04 per share and
earnings of $6.79 for the fiscal year ending in May.
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