FedEx Reports Lower 3Q Profit
FedEx Corp. said its third-quarter profit slipped from a year ago due in part to the company’s voluntary buyout program for U.S. officers, but operating profit at its less-than-truckload freight unit turned around a loss.
Net earnings fell to $361 million, or $1.23 per share, from $521 million, or $1.55, a year ago. Revenue for the quarter ended Feb. 28 rose 4% to $11 billion.
In early February, many officers and managers at FedEx Services and FedEx Express accepted a voluntary buyout the company said would be the first step to a $1.6 billion profitability improvement by 2016.
LTL unit FedEx Freight had an operating income of $4 million from a loss of $1 million a year ago, and revenue increased to $1.24 billion from $1.23 billion.
FedEx Ground’s operating income rose to $467 million from $465 million a year ago, with revenue up 11% to $2.75 billion.
FedEx Express’ operating income fell 66% to $118 million, while revenue rose 2% to $6.7 billion.
FedEx said it will earn between $1.90 and $2.10 per share in the fourth quarter and adjusted its full fiscal-year forecast to $6 to $6.20 per share before charges related to a previously announced voluntary buyout program.
The buyout costs — approximately $450 million to $550 million, or 89 cents to $1.09 per share — will be recognized in the fourth quarter, the company said.
FedEx Corp. is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
