The world's second-largest package delivery company is closely watched for signs about the health of the economy. It reported lower results for the fiscal fourth quarter ended in May due to a charge for retiring some planes.
It's getting rid of those aircraft to slim down its express network as more consumers opt for slower shipping services to save money. Operating income in that unit fell 34 per cent including the one-time charge, or 3 per cent without it.
FedEx earned 6 per cent more per package in its U.S. unit despite a 5 per cent decline in total shipments. It credited that to growth in its overnight service and higher customer charges for fuel. International priority shipment revenue rose 3 per cent, while volume fell 3 per cent as growth in Asia slowed.
Across the business, FedEx earned US$550 million or $1.73 per share in the latest quarter, compared with $558 million, or $1.75 per share, a year earlier. Revenue rose to $11 billion from $10.55 billion a year ago.
Without the charge to retire planes, FedEx Corp. would have earned $1.99 per share, 4 cents better than Wall Street estimates.
But the Memphis, Tennessee-based company's forecast for the first quarter and fiscal year fell below Wall Street's expectations and its stock fell about 2 per cent before the opening bell. FedEx is expecting higher costs, including salaries and pension, to restrain its earnings through next spring.
The company said its forecast for the fiscal year ending in May of $6.90 to $7.40 per share doesn't include major cost reductions it plans to announce in the fall. Wall Street analysts expect earnings of $7.39 per share.
The company said its forecast is based on an assumption of 2.2 per cent economic growth in the U.S. and 2.6 per cent global growth for the 12 months ending in May 2013.
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