FedEx Ground volume takes off: Freight mitigates air losses
FINANCIAL POST 30th October 2001
FEDEX GROUND VOLUME TAKES OFF: FREIGHT MITIGATES AIR LOSSES
“We believe that FedEx Ground package volume will grow approximately 9% and that yields will increase about 6%, similar to first-quarter growth rates,” FedEx chief financial officer Alan Graf said.
But in its first detailed disclosure of how the attacks have affected its business, FedEx said it expects second-quarter U.S. air express shipments to be down 11% from a year earlier, and international express to fall 5%.
Until now, FedEx had said it was unable to quantify the attacks’ effects. Most of its rivals, including top package deliverer United Parcel Service Inc., have warned of lower package volume, higher costs and weaker profits.
The shipping business was enduring a sharp slowdown even before Sept. 11, and the attacks have dampened hopes for a near-term rebound in the sector.
FedEx said its earnings for the fiscal second quarter, ending Nov. 30, should range from US40 cents to US45 cents per share, excluding US$101-million in federal aid received following the attacks. Including the aid, earnings should total US61 cents to US66 cents per share, it said.
The Memphis, Tenn.-based company’s overnight air shipping business, FedEx Express, has been the unit most affected by the attacks. The company said the diversity of its operations has helped offset those losses.
“We anticipate that Express’ U.S. domestic second-quarter average daily package volumes will decline 11% year-over-year, while FedEx International Priority shipments will decline about 5 both about four percentage points below first-quarter growth rates,” Mr. Graf said. Copyright 2001 National Post. Source: World Reporter (Trade Mark) – FT McCarthy.
