FedEx reported quarterly earnings on Wednesday that fell shy of analysts' expectations as it saw continued weakness in international air freight market and consumers chose less expensive and slower services.
After the earnings announcement, the company saw its shares fall 3 percent in premarket trading. (Click here to get the latest quotes for FedEx.)
The No. 2 U.S. package-delivery company said net income fell to $361 million, or $1.13 per share, in the third quarter, from $521 million, or $1.65 per share, a year earlier.
Excluding items related to restructuring costs, the company posted fiscal third-quarter earnings of $1.23 per share, versus $1.55 in the comparable year-ago period. Revenue increased 4 percent to $11 billion, from $10.56 billion a year ago.
"The third quarter was very challenging due to continued weakness in international air freight markets, pressure on yields due to industry overcapacity and customers selecting less expensive and slower-transit services," said Frederick W. Smith, FedEx chairman, president and chief executive officer in the company's earnings release.
Analysts had expected FedEx to report earnings per share of $1.38 on $10.85 billion in revenue, according to a consensus estimate from Thomson Reuters.
Beginning on April 1, FedEx Express will decrease capacity to and from Asia and will concentrate on placing low yielding traffic in lower-cost networks, the company said.
For the current quarter, the company expects earnings excluding items of $1.90 to $2.10 a share. It forecast full-year 2013 earnings in a range of $6 to $6.20 per share before charges related to the company's business realignment.