FEDEX, the United States package-shipping company, said yesterday that earnings fell 22 percent on waning demand for express deliveries while forecasting a profit for the current quarter that exceeds analysts' estimates.
First-quarter net income was US$384 million, or US$1.23 a share, matching the average projection of 12 analysts in a Bloomberg News survey. Revenue rose 8.4 percent to US$9.97 billion, the Memphis, Tennessee-based company said yesterday.
Fuel surcharges, which have a two-month lag from spot prices, are still reducing demand for overnight shipping. The recent decline in fuel prices and an increase in less-expensive ground offerings may help mute declines in express deliveries.
The results were for the three months ending on August 31. First-quarter earnings a year earlier were US$494 million, or US$1.58 a share.
FedEx said fiscal second-quarter earnings would be US$1.40 to US$1.60 a share. The company also reiterated its full-year profit outlook of US$4.75 to US$5.25 a share.
FedEx fell US$1.56, or 1.8 percent, to US$86.51 in New York Stock Exchange composite trading yesterday.
"Global economic conditions are challenging, but FedEx is taking strong, proactive actions to manage through this difficult cycle," Chief Executive Officer Fred Smith said.
Earlier this month, FedEx cut its capital spending budget for the fiscal year by US$400 million, to US$2.6 billion.