Thursday, December 20, 2007

FedEx profit falls on higher fuel costs

Package delivery company FedEx Corp. said Thursday its fiscal second-quarter earnings fell 6 percent, as the impact of high fuel costs and a weakening U.S. economy overshadowed international growth.

The company also released a third-quarter outlook under Wall Street's expectations and reaffirmed its outlook for the fiscal year.

For the quarter ended Nov. 30, the company earned $479 million, or $1.54 per share, compared with a year-ago profit of $511 million, or $1.64 per share.

Revenue rose 6 percent to $9.45 billion from $8.93 billion in the prior-year period.

Analysts were expecting a profit of $1.50 per share on revenue of $9.32 billion, according to a poll by Thomson Financial.

"High fuel prices and weak U.S. economic growth year over year have impacted our business," said Frederick W. Smith, FedEx Corp. (FDX, Fortune 500) chairman, president and chief executive, in a statement. "We continue to benefit from solid international growth, which helps mitigate softness in U.S. industrial production. While we see challenging near-term economic trends, we remain confident about long-term prospects in all our business segments."

For the fiscal 2008 third quarter, the company expects to earn $1.15 to $1.30 per share, compared with $1.35 per share a year-ago.

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