Fedex grows in Q1, but predicts a more difficult Q2

Share this content:

FedEx Corp. reported its first quarter revenue was up 8 percent to $9.20 billion, up from $8.55 billion the previous year.

Its operating income of $814 million was up 4 percent from $784 million a year ago. The carrier's operating margin of 8.8 percent was down from 9.2 percent the year before. In addition, the company's net income of $494 million is up 4 percent from last year's $475 million.

"FedEx increased its revenue and earnings against the backdrop of a sluggish US economy," said Frederick W. Smith, FedEx Corp. chairman, president and CEO in a presentation with analysts. "Outside of the United States, the economy is generally solid, contributing to the growth in our international express shipments. I continue to believe that FedEx will, over the long-term, reap the rewards of our strategy of investing in key growth markets and strengthening and expanding our worldwide"

Although the company experienced a good quarter, it does not expect the same good fortune in the future as the housing slowdown is affecting shipments. Fuel costs are also negatively contributing.

"While the US economy is growing at a moderate pace, recent financial market volatility and high energy costs have increased the uncertainty surrounding the near-term economic outlook, and weakness in the housing sector continues," said Alan B. Graf, Jr., FedEx Corp executive vice president and CEO in a presentation with analysts. "As a result of this weaker than anticipated economic environment, particularly its impact on the LTL freight market, we have reduced our earnings forecast by four percent for the full year."

FedEx expects second-quarter earnings of $1.60 to $1.75 a share. The company's forecast is below analysts' average estimate of $1.97 a share.

For the entire year, FedEx reduced its outlook to $6.70 to $7.10 a share, from $7 to $7.40 a share.

close

Next Article in Direct Mail

Sign up to our newsletters

Company of the Week

Brightcove is the world's leading video platform. The most innovative and respected brands confidently rely on Brightcove to solve their most demanding communication challenges because of the unmatched performance and flexibility of our platform, our global scale and reliability, and our award-winning service. With thousands of customers and an industry-leading suite of cloud video products, Brightcove enables customers to drive compelling business results.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here