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FedEx meets forecasts
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December 20, 2000: 2:08 p.m. ET
Package delivery company earns 67 cents a share for second quarter
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NEW YORK (CNNfn) - FedEx Corp. Wednesday reported its profit rose 13 percent for the latest quarter, meeting Wall Street forecasts, less than a week after the package delivery company warned about results in the second half of its fiscal year.
The Memphis-based company said in a statement it earned $194 million, or 67 cents a diluted share, in its second quarter ended Nov. 30, up from $171 million, or 57 cents a share, a year earlier. Wall Street had been forecasting a profit of 67 cents a share, according to First Call, which tracks analysts' estimates. Sales rose 7 percent to $4.9 billion, FedEx said.
 Analysts had raised their forecasts to 67 cents a share from 64 cents a share for the quarter after the company said last week it expected to beat second-quarter estimates.
But at the same time warned that its second-half results will be far below current forecasts, a projection that assumes the U.S. economy has a "soft landing" rather than falling into recession.
The company blamed a slowdown in the U.S. economy and recent severe weather that hurt shipments in December. The company is also seeing softening shipments from Asia, which had been a growing business for FedEx.
FedEx Chief Financial Officer Alan Graf told CNNfn productivity, cost management and growth helped the company overcome a tough quarter. (447K WAV or 447K AIFF)
Fuel costs rose $78 million from a year earlier, Graf said, but that was mostly offset by fuel surcharges and hedging programs. He said the surcharge would come down as fuel prices dropped.
He added the company expects its international priority service business to continue double-digit growth in calendar 2001.
FedEx isn't the only carrier affected by the changing economy. Rival UPS, the world's largest transportation company based in Atlanta, said last week it expects earnings of 60-to-62 cents a share for the latest quarter, compared with analysts' forecasts for 64 cents a share. UPS blamed softer holiday shipments.
FedEx (FDX: Research, Estimates) stock rose 18 cents to $37.93 in afternoon trading. UPS (UPS: Research, Estimates) shares slipped $1.37 to $54.38 Tuesday. 
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