FedEx posts large decline in quarterly profit
The FedEx Corporation, the overnight package-delivery company, has said that it had its biggest quarterly drop in net income in six years, as daily air shipments in the United States fell and more employees than expected took buyouts.
Shares of FedEx declined $3.30, to $71.01, on the news.
Many investors had forecast a rise in the domestic shipments, rather than the 1% decrease reported, after the economy expanded in the third quarter at the fastest annual rate in two decades.
Net income in FedEx’s second quarter dropped to $91 million, or 30 cents a share, from $245 million, or 81 cents a share, a year earlier, the company said.
Revenue in the period, which ended Nov. 30, rose 4.4%, to $5.92 billion, helped by higher ground and air revenue.
Excluding costs for retired workers and others leaving the company, FedEx said profit was $266 million, or 87 cents a share, less than the 90 cents expected by analysts surveyed by Thomson First Call. FedEx said it paid $320 million into its pension plan in the latest quarter and spent $283 million on severance costs.
Growth in shipments by truck slowed to 3% from 25% a year earlier. International revenue climbed 10% for each package, while sales for each package handled by truck rose 4%.
