FedEx posted a net income of US$438 million, or earnings of $1.39 per share, in the second quarter ended November 30, down 12 percent from $497 million, or $1.57 per share, for the same quarter last year.
The Memphis, Tennessee-based parcel giant attributed the earnings fall to the global trade slowdown and the damage caused by Superstorm Sandy.
“Superstorm Sandy impacted the quarter’s results by $0.11 per diluted share due to reduced shipment volumes and incremental operating costs,” the company said in a media statement on December 19.
Revenue for the period was $11.1 billion, up 5 percent from $10.6 billion the previous year, while operating income of $718 million was down 8 percent from $780 million last year.
The freight and ground units improved their operating incomes for the quarter due to increased volumes and higher yields, but the express division’s operating income was dragged down by “persistent weakness in the global economy and increased demand for lower-yielding international services,” said Frederick W. Smith, FedEx chairman, president, and chief executive officer.
The results of the quarter also reflected, primarily in the express division, the year-over-year delay between the changes in fuel prices and the adjustments to the fuel surcharges, the company said.
For the third quarter, FedEx projects earnings of $1.25 to $1.45 per share and, for fiscal 2013, reaffirmed its forecast of $6.20 to $6.60 per share.
“We are steadfastly committed to the $1.7 billion of annual profit improvement actions, primarily at FedEx Express, which we announced in October,” said Alan B. Graf, Jr., group executive vice president and chief financial officer.
At the same time, he expressed concern that the mounting uncertainty over the U.S.’ fiscal policies could cut earnings by further restraining economic growth.
Photo courtesy of FedEx
