Date: Tuesday 18 Sep 2012
US delivery company FedEx has lowered its projected outlook after it presented fiscal first quarter net income that fell shy of last year's mark.
Earnings for the fiscal first quarter came in at $1.45 per diluted share compared to $1.46 per share last year.
FedEx now expects 2013 earnings per share (EPS) of $6.20 - $6.60 compared to its prior estimate of $6.90 - $7.40. Second quarter EPS is expected to come in at $1.30 - $1.45. The company said that the weakening global economy is impacting its results.
The company announced that it will raise shipping rates in 2013 in an attempt to offset falling volume and falling margins, especially for priority services.
"As we announced on September 4, weakness in the global economy constrained revenue growth at FedEx Express during our first quarter and affected our earnings," said FedEx Chairman Frederick Smith.
"Meanwhile, our FedEx Ground and FedEx Freight segments performed well, with both improving their year-over-year operating margins. We are taking further actions to reduce costs and adjust our networks to match current and anticipated shipment volumes."
FedEx is seen as a reliable bellwether for global economic activity.
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