FedEx profit falls on weak airfreight business - Boston News, Weather, Sports | FOX 25 | MyFoxBoston

FedEx profit falls on weak airfreight business

Posted: Updated:

DALLAS (AP) -- FedEx said Wednesday that its third-quarter profit fell 31 percent as customers opted for less-expensive ground shipping, hurting the company's airfreight business.

The company says it will cut capacity to and from Asia starting next month and might retire some of its older airplanes.

FedEx shares fell more than 3 percent in trading before the opening bell.

FedEx Corp. said its net income fell to $361 million, or $1.13 per share, in the three months ended Feb. 28. That's down from $521 million, or $1.65 per share, a year earlier.

Excluding costs of voluntary buyouts for some U.S. employees, the company says it would have earned $1.23 per share.

Revenue rose 4 percent to $11 billion.

Analysts were looking for $1.38 per share and revenue of $10.9 billion, according to FactSet.

The company's fiscal year ends in May. It expects adjusted earnings of between 94 cents to $1.34 per share in its fourth quarter and $6 and $6.20 per share for the year. That is below analysts' forecasts of $2.12 and $6.35 per share, respectively.

Memphis-based FedEx is the world's second-biggest package-delivery company. It's seen as a gauge of the overall economy because so many consumers and a range of businesses use its shipping services.

Chairman and CEO Frederick W. Smith said the company's fiscal third quarter, which ended Feb. 28, was "very challenging" due to weakness in the global air freight business and customers picking slower, less-expensive ways to ship packages.

Smith said the company will respond by cutting capacity to Asia and directing less profitable shipments into "lower-cost networks." He said the company was studying whether the moves will let it retire older, less-efficient planes.

FedEx plans to cut annual costs $1.7 billion by 2016 with buyouts that will reduce its workforce by at least 10 percent by May 2014. The company said Wednesday that it will spend $450 million to $550 million in cash on the buyouts during the fiscal year ending in May, with "some additional costs" in the following 12 months.

FedEx lowered its capital-spending plan for the current year to $3.6 billion from $3.9 billion.

FedEx shares fell $3.72, or 3.5 percent, to $102.74 in premarket trading.

  • Your MoneyMore>>

  • The future of technology

    The future of technology

    Wednesday, July 23 2014 7:01 PM EDT2014-07-23 23:01:39 GMT
    For New Yorkers fed up with the nightmare otherwise known as traffic, a futuristic answer may be closer than you think: driverless cars.Gray Scott is a futurist with seriouswonder.com. He and his colleagues track the future of technology. He says driverless cars will be a reality.After launching Google Glass just months ago, Google is about to take vision innovation a step further.
    For New Yorkers fed up with the nightmare otherwise known as traffic, a futuristic answer may be closer than you think: driverless cars.Gray Scott is a futurist with seriouswonder.com. He and his colleagues track the future of technology. He says driverless cars will be a reality.After launching Google Glass just months ago, Google is about to take vision innovation a step further.
  • Puerto Rico's economic woes worry bondholders

    Puerto Rico's economic woes worry bondholders

    Wednesday, July 23 2014 6:41 PM EDT2014-07-23 22:41:09 GMT
    Puerto Rico just balanced its first budget in more than a decade. Sales taxes are up. But optimism remains low when it comes to those making financial investments in the commonwealth. Maglan Capital hedge fund managers David Tawil and Steven Azarbad seem to think Puerto Rico itself is not in any imminent financial danger, just its major utility companies. So why is this news to you? The simple answer: Puerto Rico is a major player when it comes to what Wall Street investors are interested in.
    Puerto Rico just balanced its first budget in more than a decade. Sales taxes are up. But optimism remains low when it comes to those making financial investments in the commonwealth. Maglan Capital hedge fund managers David Tawil and Steven Azarbad seem to think Puerto Rico itself is not in any imminent financial danger, just its major utility companies. So why is this news to you? The simple answer: Puerto Rico is a major player when it comes to what Wall Street investors are interested in.
  • Some StubHub accounts breached

    Some StubHub accounts breached

    Wednesday, July 23 2014 4:34 PM EDT2014-07-23 20:34:20 GMT
    Six people were indicted Wednesday in an international ring that managed to take over more than 1,000 StubHub users' accounts and fraudulently buy tickets to such prime events as Jay-Z and Elton John concerts, a New York Yankees-Boston Red Sox game and Broadway shows like "The Book of Mormon," the Manhattan district attorney said. Manhattan District Attorney Cyrus R. Vance Jr. said the thieves would then resell the tickets and split up the proceeds.
    Six people were indicted Wednesday in an international ring that managed to take over more than 1,000 StubHub users' accounts and fraudulently buy tickets to such prime events as Jay-Z and Elton John concerts, a New York Yankees-Boston Red Sox game and Broadway shows like "The Book of Mormon," the Manhattan district attorney said. Manhattan District Attorney Cyrus R. Vance Jr. said the thieves would then resell the tickets and split up the proceeds.
Powered by WorldNow

25 FOX Drive
Dedham, MA 02026

Phone (781) 467-2525

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices