FedEx Corp. (NYSE: FDX) this morning reported first fiscal quarter earnings per share (EPS) of $1.45 on revenue of $10.79 billion. In the same period a year ago, the company reported EPS of $1.46 on revenue of $10.52 billion. First-quarter results compare to the Thomson Reuters consensus estimates for EPS of $1.40 and $10.70 billion in revenue.
The company’s chairman/president/CEO said:
As we announced on September 4, weakness in the global economy constrained revenue growth at FedEx Express during our first quarter and affected our earnings. Meanwhile, our FedEx Ground and FedEx Freight segments performed well, with both improving their year-over-year operating margins. We are taking further actions to reduce costs and adjust our networks to match current and anticipated shipment volumes.
FedEx forecast second fiscal quarter EPS at $1.30 to $1.45, well below the consensus estimate of $1.67. The company also lowered its full 2013 fiscal year EPS forecast from a range of $6.90 to $7.40 to a new range of $6.20 to $6.60. The consensus forecast called for EPS of $7.04.
The company’s CFO gave a concise explanation of the company’s problems:
Earnings for the first quarter were below our expectations as weak global economic conditions dampened revenue growth, drove a shift by our customers to our deferred services and outpaced our near-term ability to reduce FedEx Express operating costs to match demand levels.
FedEx will raise shipping rates by 5.9% in the U.S. beginning in January, which will result in an effective rate of 3.9% after adjusting the company’s fuel-price surcharge down by 2%. The company will announce FedEx Ground and SmartPost pricing changes later this year. FedEx had already raised FedEx Freight rates 6.9% in July.
Unlike so many others eager to jump over dramatically lower hurdles, FedEx essentially acknowledges that expectations were set so low following the company’s earnings warning that anyone could have jumped over them.
The company’s shares are down 1.7% in premarket trading this morning, at $87.71 in a 52-week range of $64.07 to $97.19.
Paul Ausick
The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.