FedEx profit down 12 percent in wake of massive storm


FedEx Corp reported an 11.9 percent drop in quarterly profit, hurt by higher costs and lower shipment volumes in the wake of Superstorm Sandy as well as its customers' shift to lower-cost shipping methods.

The No. 2 U.S. package-delivery company on Wednesday reported fiscal second-quarter earnings of $438 million, or $1.39 per share, compared with $497 million, or $1.57 per share, a year earlier.

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Revenue rose 4.7 percent to $11.1 billion from $10.6 billion a year earlier.

The company held steady its profit forecast for its 2013 fiscal year, which calls for profit of $6.20 per share to $6.60 per share for the fiscal year that ends in May. FedEx in September cut that forecast by about 10 percent.

"Persistent weakness in the global economy and increased demand for lower-yielding international services limited profits at FedEx Express," said Chief Executive Fred Smith, referring to the company's air freight operation.

Smith in October laid out plans to sharply cut costs at the company's slumping air express business, which has seen demand drop as corporate customers look for cheaper ways of transporting merchandise.

(Reporting by Scott Malone; Editing by Lisa Von Ahn and Chizu Nomiyama)