Thread: FDX defers 11 Boeing 777F, orders 767
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Old 12-15-2011 | 04:22 AM
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FedEx Orders 27 New Boeing Freighters - Bloomberg

FedEx Corp. (FDX) posted a quarterly profit that beat analysts’ estimates and ordered 27 Boeing Co. 767 jet freighters to retire some of the older planes at the world’s largest cargo airline.

Profit for the fiscal second quarter ended Nov. 30 rose to $497 million, or $1.57 a share, from $283 million, or 89 cents, a year earlier, the Memphis, Tennessee-based company said in a statement. Delivery of 11 larger Boeing 777 aircraft already on order will help balance capacity with lower demand from FedEx Express customers using up inventory, the company said today.

The 767s will be about 30 percent more fuel-efficient than the MD10 jets they’re replacing, some of which are more than 40 years old, FedEx said. Three of the jets will be delivered in 2014 and six a year from 2015 through 2018. The jets have a catalog price of $175.4 million, though carriers typically negotiate discounts.

Delaying delivery of the 777s is a continuation of efforts during the quarter to adjust the company’s network, particularly in Asia, “as recent destocking trends have impacted demand for our FedEx Express services,” said Chief Financial Officer Alan Graf.

FedEx and rival United Parcel Service Inc. (UPS) are considered economic barometers because they deliver goods ranging from pharmaceuticals and financial documents.

Adjusted earnings for the quarter ending Feb. 29 will be $1.25 to $1.45 a share, the company said. That’s in line with the $1.31 average estimate from 21 analysts in a Bloomberg survey.

FedEx rose 2.9 percent to $79.50 at 7:57 a.m. in New York before regular trading.

To contact the reporter on this story: Natalie Doss in New York at [email protected]

To contact the editor responsible for this story: Ed Dufner at [email protected].
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