FedEx Earnings Grow
 

FedEx 1Q Profit Rises on Shipping Growth
FedEx First-Quarter Profit Rises Modestly on Shipping Growth; Shares Move Higher

The Associated Press

Sep. 21, 2005 - The shipping company FedEx Corp. on Wednesday said first-quarter profit rose modestly, weighed down by an accounting charge, while revenue showed solid growth as daily package volume expanded. Its shares rose more than 7 percent.

FedEx earned $339 million, or $1.10 per share, for the three months ended Aug. 31, up from $330 million, or $1.08 per share, last year. Setting aside a one-time charge from changing its lease accounting, earnings would have been $1.25 per share.

The company's adjusted profit easily beat the average estimate of $1.17 per share from analysts surveyed by Thomson Financial.

FedEx shares jumped $5.86, or 7.6 percent, to $82.86 in morning trading on the New York Stock Exchange. Its shares have traded in a 52-week range of $76.81 to $101.87.

Quarterly revenue totaled $7.71 billion, up 10 percent from $6.98 billion a year earlier and beating analysts' consensus target of $7.58 billion. FedEx posted double-digit increases across its shipping segments, while revenue at its Kinko's document services unit rose just 6 percent.

FedEx's operating expenses climbed 11 percent to $7.12 billion, with fuel costs swelling 51 percent to $728 million from $483 million a year ago.

It expects second-quarter earnings of $1.30 to $1.45 per share. The company also raised its yearly guidance by 5 cents to a range of $5.25 to $5.50 per share.

Analysts currently see second-quarter income of $1.35 per share and full-year earnings of $5.28 per share. FedEx earned $1.21 per share in last year's second quarter and posted a profit of $4.78 per share for 2004.

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