FedEx Profit, Sales Rise Despite Weak Demand
Delivery company FedEx reported quarterly earnings and revenue that rose from a year ago and topped analysts' consensus expectations Wednesday, including a one-time gain.
FedEx was cautious on guidance for the current quarter, with the high end of its profit forecast just in line with market expectations, but said it expects the economy to bounce back in the late summer or early fall of this year.
The company reported net income of $610 million, or $1.96 a share, for its fiscal fourth-quarter, which ended in May, up from $568 million, or $1.82 a share. Excluding a one-time gain for cancellation of an Airbus A380 order of 6 cents a share, the company earned $1.90 a share.
Analysts surveyed by Thomson Financial predicted a profit of $1.95 a share, while the company had forecast a profit of $1.93 to $2.01 a share.
Revenue rose 8% from the year-ago period to $9.15 billion, topping expectations of $9.14 billion.
"FedEx delivered solid financial results in fiscal 2007 even though we were restrained by a slowing U.S. economy," FedEx Chairman, President and CEO Frederick W. Smith said in a statement. "The weakened industrial sector is currently limiting demand for transportation services, but we expect the U.S. economy to begin to show modest year-over-year improvement in the late summer to early fall timeframe.
Looking ahead, FedEx predicted a profit of $1.45 to $1.60 a share for its fiscal first quarter, compared with expectations of $1.60 as share by analysts. For fiscal 2008, the company expects profit of $7 to $7.40 a share, compared with expectations for $7.39 a share.
The stock rose 0.9% before hours.