FedEx profit falls on weak airfreight business - Los Angeles News | FOX 11 LA KTTV

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>>

  • Manhattan West Project

    Skyline of West Side is changing

    Skyline of West Side is changing

    Tuesday, July 22 2014 6:25 PM EDT2014-07-22 22:25:22 GMT
    The Manhattan West Project is a $4.5 billion development that will change the skyline on the West Side. The five-acre site that will consist of office towers, a residential building, retail, a 5-star hotel, health and fitness facilities, rooftop gardens, restaurants, cafes, and a park is being built on top of active rail yards. Fox 5 got a look at the progress of the project.
    The Manhattan West Project is a $4.5 billion development that will change the skyline on the West Side. The five-acre site that will consist of office towers, a residential building, retail, a 5-star hotel, health and fitness facilities, rooftop gardens, restaurants, cafes, and a park is being built on top of active rail yards. Fox 5 got a look at the progress of the project.
  • Beach fashion

    Long-sleeved swimsuit is latest beach and pool fashion trend

    Long-sleeved swimsuit is latest beach and pool fashion trend

    Monday, July 21 2014 6:13 PM EDT2014-07-21 22:13:49 GMT
    You have lots of ways to look stylish on the beach, from a bikini to a tankini to a one piece. But the newest trend is long-sleeved swimsuits -- modesty takes precedence over a golden glow. The new beachwear is turning up on sites like ASOS and on luxury sites like Neiman Marcus. There are one piece versions and crop top versions.One of the pioneers of the trend is Dallas-based clothing company Cover.
    You have lots of ways to look stylish on the beach, from a bikini to a tankini to a one piece. But the newest trend is long-sleeved swimsuits -- modesty takes precedence over a golden glow. The new beachwear is turning up on sites like ASOS and on luxury sites like Neiman Marcus. There are one piece versions and crop top versions.One of the pioneers of the trend is Dallas-based clothing company Cover.
  • Wawa to close first store opened 50 years ago

    Wawa to close first store opened 50 years ago

    Monday, July 21 2014 3:01 PM EDT2014-07-21 19:01:43 GMT
    Wawa plans to close the first convenience store opened by the chain in the Philadelphia suburbs a half-century ago.  Susan Bratton, Wawa's regional real estate manager, says the old store is just too small.
    Wawa plans to close the first convenience store opened by the chain in the Philadelphia suburbs a half-century ago.  Susan Bratton, Wawa's regional real estate manager, says the old store is just too small.
Powered by WorldNow

KTTV FOX 11
1999 S. Bundy Dr.
Los Angeles CA 90025

Main: (310) 584-2000
News Tips? (310) 584-2025

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