FedEx quarterly profit down 12pc on US storm
New York, December 19, 2012
FedEx Corporation reported an 11.9 per cent drop in quarterly profit, hurt by higher costs and lower shipment volumes in the wake of Superstorm Sandy as well as its customers' shift to lower-cost shipping methods.
The number two US package-delivery company on Wednesday reported fiscal second-quarter earnings of $438 million, or $1.39 per share, compared with $497 million, or $1.57 per share, a year earlier.
Revenue rose 4.7 per cent to $11.1 billion from $10.6 billion a year earlier.
The company held steady its profit forecast for its 2013 fiscal year, which calls for profit of $6.20 per share to $6.60 per share for the fiscal year that ends in May. FedEx in September cut that forecast by about 10 per cent.
"Persistent weakness in the global economy and increased demand for lower-yielding international services limited profits at FedEx Express," said chief executive Fred Smith, referring to the company's air freight operation.
Smith in October laid out plans to sharply cut costs at the company's slumping air express business, which has seen demand drop as corporate customers look for cheaper ways of transporting merchandise. – Reuters