FedEx said quarterly profit fell from a year earlier as the U.S. economy grew at a weaker pace than expected. And the package delivery company said its fiscal 2008 growth target may be in doubt.
FedEx said earnings fell to $1.35 a share for its fiscal third quarter, which ended in February, from $1.38 a share in the year-ago period. The profit includes 6 cents a share in charges, including those for fuel surcharges and storms, and a benefit of 8 cents a share for a reduction in the company's tax rate. On average, analysts surveyed by Thomson Financial predicted a profit of $1.33 a share.
Revenues rose 7% from the year-ago period to $8.6 billion, a bit shy of expectations for $8.7 billion.
In addition, the company's chief financial officer said the company may not achieve its 2008 long-term growth target of 10% to 15%.
"A lot will depend on whether the economy improves from where it is today," CFO Alan Graf said in a conference call with analysts, according to Reuters.
For its fiscal fourth quarter, the company predicted earnings of $1.93 to $2.08 a share, in line with expectations for a profit of $2.03 a share. But the company also said it expected 2007 fiscal full-year earnings per share in a range of $6.45 to $6.60, lower than expectations for earnings of $6.78 a share.