FedEx 2Q Profit Falls Short, Shares Slump


FedEx (NYSE:FDX) delivered a fiscal second-quarter earnings dud to Wall Street on Thursday, posting non-GAAP profits and revenue that came in behind schedule.Despite the earnings miss, Memphis-based FedEx upped its financial guidance for the rest of the year.The company said it earned $283 million, or 89 cents a share, last quarter, 18% lower than a year-earlier profit of $345 million, or $1.10 a share. Excluding one-time items, it posted a profit of $1.16 a share, badly trailing the Street’s view of $1.31 a share.Revenue climbed 12% to $9.63 billion, missing forecasts from analysts for $9.7 billion.FedEx said its express revenue grew by 13% to $5.99 billion, matching a 13% rise in ground revenue to $2.08 billion. Freight revenue jumped by 14% to $1.22 billion, while services revenue slid 7% to $434 million.“Solid demand for our transportation solutions, outstanding customer service from FedEx team members and a healthier global economy helped drive second-quarter revenue higher,” CEO Frederick Smith said in a statement. “Our yield improvement strategy is working, holiday peak season volumes are exceeding our expectations and our economic forecast for calendar 2011 has improved.”Looking ahead, FedEx said it sees fiscal third-quarter profits of 95 cents to $1.15 a share. The midpoint of that range would exceed the Street’s view of $1.10. However, the shipping giant forecasted fiscal 2011 EPS of $5.00 to $5.30, compared with consensus calls for $5.21.Shares of FedEx slumped 2.27% to $90.25 ahead of Thursday’s open, putting pressure on the broader markets and rival UPS (NYSE:UPS).

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