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FedEx delivers weak profits
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December 11, 1997: 6:32 p.m. ET
Package carrier misses Wall Street's expectations and share price suffers
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NEW YORK (CNNfn) - Federal Express Corp. Thursday reported its fiscal second-quarter net rose 3 percent to $107 million, or 91 cents a share, falling short of Wall Street estimates.
Analysts surveyed by the First Call Research Network had forecast per-share earnings of 95 cents.
In the year-ago period, the small-package express carrier earned $103.7 million, or 90 cents a share.
Revenues for the latest quarter, ended Nov. 30, rose 16 percent to $3.299 billion from $2.852 billion a year earlier.
FedEx (FDX) shares closed down 5 to 62-3/8 on the New York Stock Exchange Thursday.
"Worldwide demand for FedEx's unique express service continues to expand, as evidenced by the quarter's 5 percent year-over-year increase in international operating income, despite new flights which limited international profits for the quarter," said Executive Vice President and Chief Financial Officer Alan B. Graf.
While revenue per package continues to rise, according to Graf, accelerated growth put pressure on FedEx's cost and productivity performance in the second quarter.
The company incurred additional expenses with the opening of the southwest regional hub at Fort Worth Alliance Airport and the small package sort system at its main hub in Memphis, Tenn.
"As these state-of-the-art automated facilities reach capacity, we expect significant improvements in productivity," Graf said.
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Federal Express
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