FedEx Beats Expectations, But Lowers Outlook
Package delivery company FedEx on Thursday reported a higher-than-expected third-quarter net profit but forecast fourth-quarter results below estimates, citing soaring fuel prices and slowing U.S. economic growth.
"Our fourth-quarter earnings outlook has been impacted by higher-than-anticipated fuel prices and a weak U.S. economy," Chief Financial Officer Alan Graf said in a statement.
"Looking ahead to our fiscal 2009, we are expecting a continuation of fourth-quarter trends, which would result in limited earnings growth next year."
"We are scrutinizing all expenses and investments to realign them with the current environment," he added.
The Memphis-based company reported net income for its quarter ending Feb 29 of $393 million, or $1.26 a share, down almost 7 percent from $420 million, or $1.35, a share a year earlier.
Wall Street analysts had on average expected earnings per share for the quarter of $1.23, according to Reuters Estimates.
Revenue in the quarter rose 10 percent to $9.44 billion from $8.59 billion a year earlier. Analysts had expected revenue of $9.15 billion.
FedEx said it expects fourth-quarter earnings per share of $1.60 to $1.80, well below the $1.98 predicted by analysts.
In light trading on the New York Stock Exchange, FedEx shares were down $2.12, or more than 2 percent, at $84.11, from Wednesday's official closing price of $86.23.
Like main rival United Parcel Service, FedEx is considered a bellwether of U.S. economic health.