FedEx, citing revenue drop, plans more cuts
FedEx corp. today announced revenue of $8.14 billion for the quarter ended Feb. 28, down 14% from $9.44 billion the previous year, and said it would implement further cost-saving measures.
The company reported operating income of $182 million, down 72% from $641 million a year ago.
FedEx also reported earnings of 31 cents per diluted share for the third quarter ended February 28, compared to $1.26 per diluted share a year ago.
“Our financial performance was sharply lower during the quarter due to the global recession,” said Frederick W. Smith, FedEx Corp. chairman, president and CEO, in a statement. “While we are gaining market share in all of our transportation segments, the downturn in our industry and the severity and expected duration of the recession require that we take additional actions.”
In light of the continuing deterioration in the global economy, FedEx said it will implement additional cost-reduction initiatives, both in the US and internationally. These measures include: network capacity reductions at FedEx Express and FedEx Freight; further reduction of personnel and work hours; streamlining of information technology systems and other internal processes; and additional reductions in other spending categories.
These cost-reduction actions are expected to result in fourth quarter charges of approximately $100 million, excluding any potential asset impairment charges, the company said. For fiscal 2010, these actions are targeted to reduce expenses by approximately $1 billion.