Earnings of FedEx Corp. for the third quarter ended February 28, 2013 were badly hurt by heavy winter storms, causing the global logistics group to slash its fiscal-year profit prediction.
Lower-than-expected earnings for the third quarter reached US$1.23 per diluted share compared to $1.13 per share year-over-year.
“Historically severe winter weather significantly affected our third-quarter earnings,” said Frederick Smith, group chairman and chief executive officer.
“Unusually severe winter storms throughout the quarter disrupted operations, decreasing shipping volume and increasing costs, and impacted year-over-year operating income by an estimated $125 million,” a company statement added.
FedEx reported revenue of $11.3 billion for the third quarter, up 3 percent from the previous year. Operating income was $641 million, an increase of 9 percent, while net income amounted to $378 million, higher by 5 percent from last year’s $361 million.
The group has lowered its full-year earnings forecast due to the impact of the severe weather disturbances, said Alan Graf, Jr., FedEx executive vice president and chief financial officer. The company projects earnings to be $2.25 to $2.50 per diluted share in the fourth quarter and $6.55 to $6.80 per diluted share for fiscal 2014.
“While severe winter weather often affects our third-quarter results, the impact from multiple severe storms and frigid temperatures was significantly more pronounced this year and we are reducing our full-year earnings per share guidance as a result of the weather impact,” he added.
He continued: “The $1.6 billion profit improvement plan at FedEx Express remains on track despite the near-term impact of weather. Our accelerated stock repurchase program initiated in January reflects our confidence in achieving our financial goals.”
