FedEx posts bigger loss, issues gloomy outlook - Yahoo! Finance



NEW YORK (AP) -- FedEx Corp. on Wednesday warned it expects "extremely difficult" conditions in the next two quarters because of the global recession.
The nation's second largest package shipper also posted a bigger fiscal fourth-quarter loss due to hefty one-time charges and lower revenue.
The company lost $876 million, or $2.82 per share in the three month period ending in May, compared with a loss of $241 million, or 78 cents per share a year ago.
Excluding one-time charges, earnings were 64 cents per share.
Revenue in the fourth-quarter fell 20 percent to $7.85 billion.
Thomson Reuters says analysts expected profit of 51 cents per share for the period on revenue of $8.32 billion.
FedEx predicted earnings in its first-quarter well below what analysts forecast. The company sees a profit of 30 cents to 45 cents per share for the period ending in August, compared with analysts' consensus forecast of 68 cents per share. FedEx posted a profit of $1.23 per share for the same period a year ago.
"The operating environment for our first two quarters in fiscal 2010 is expected to be extremely difficult," executive vice president and chief financial officer Alan B. Graf Jr. said.
Graf said that sluggish manufacturing activity and another run-up in fuel prices will hold back earnings in the company's first and second quarters.
Graf also expects that FedEx's performance will begin to improve in the last two fiscal quarters of 2010 as cost-cutting measures start to "gain traction."
Memphis, Tennessee-based FedEx booked about $1.2 billion in charges in the fourth quarter as it wrote down the value of two acquisitions.
The company took a $900 million writedown related to the 2004 purchase of Kinko's -- now known as FedEx Office -- and $90 million in charges related to a September 2006 acquisition of a trucking company and its affiliates. It also took charges for employee severance and facility cutbacks.
FedEx and bigger rival UPS Inc. are viewed as bellwethers of the economy because they transport a wide variety of goods from factories to retailers and consumers.
Fourth-quarter revenue for the FedEx Express unit dropped 25 percent as the unit moved fewer packages and fuel prices rose.
In the freight segment, revenue dropped 28 percent with pricing among trucking companies staying highly competitive and shipping demand weak.
The company's ground segment revenue fell 1 percent, supported by gains from a delivery partnership with the U.S. Postal Service.
For the full fiscal year, FedEx posted a profit of $3.76 per share, compared with $5.83 a year ago. Revenue fell 6 percent to $35.5 billion.

Thanks Kinkos!

But then again, I just got this hit from a daily Google Alert on FEDEX 2 days ago.

(...amazing how these types of "there may be light at the end of the dark tunnel" articles never seem to be posted on the FEDEX company websites nowadays....hmmmm)

Maritime - FedEx sees pick-up in air-cargo volume

Monday June 15, 2009

FedEx sees pick-up in air-cargo volume

By SHARIDAN M. ALI

KUALA LUMPUR: FedEx Express (FedEx), a subsidiary of New York Stock Exchange-listed FedEx Corp, believes the drop in air transportation volume has bottomed out and hopes volume will pick up later in the year.

FedEx vice-president of legal and regulatory affairs Steven H. Taylor said the company currently did not see as big a cargo volume decline as it did earlier in the year.

“Similar to the aviation industry’s forecast, we are anticipating lower volume this year but we hope to see an increase as the year progresses.

“This year, we are not optimistic of recording the kind of volume we experienced a couple of years ago.

“And the volume contraction in our domestic market (in the United States) is much smaller than the contraction in our international market,” he said.
Taylor was speaking to StarBiz at the International Air Transport Association (IATA) AGM and World Air Transport Summit last week.

IATA forecast that global air-cargo demand would decline 17% and airlines are expected to carry 33.3 million tonnes of cargo this year against 40.1 million tonnes last year.

Air-cargo traffic started to decline in June last year and had dropped by 23% year-on-year in December. The air-cargo industry moves about 35% of the value of goods traded internationally and is a leading economic indicator.

“The current economic environment is the main driver of the plunging demand,” Taylor said.

As a result of the contracting demand, he said FedEx had cut its capacity globally and strategised to phase out its old aircraft, which would be offset with its fleet renewal programme.

“We are phasing out our old Boeing 727 and replacing that with 757 in the United States.

“For our Asian operations, we have ordered a number of Boeing 777s, the first of which will be delivered by the year-end and the rest on a staggered basis over a couple of years,” he said.

The biggest express carrier in the United States would also to continue with its Asian operations, as the region is the largest market for its international business.

“We will continue with our operations in Asia where we have our second largest hub in Guangzhou, China.

“Here in Malaysia, we fly into Penang. We also fly into Singapore, Hong Kong and other major cities in Asia,” Taylor said, adding that FedEx was among the top three express carriers in Asia together with DHL and UPS.

On the exit of competitor DHL from the US market due to the global economic downturn, Taylor said it had been an advantage to FedEx but DHL was still a formidable competitor in Asia.

Yep, a paper loss to offset income and reduce taxes. A great deal for FedEx.

Chairman's letter posted on P.F.C

QDM and RENEWAL for our opcos...Check

Looks like Steve didn't get the message from Fred - RLA or no 777's.

It's RLA or no options exercised on the second 777 buy.

Yeah, it's the second buy of 15 and the options for another 15 that have the RLA clause.

Don't you just love people who throw in their expertise when they really don't have a clue.

You should keep that kind of talk off the public boards. It's just not a very nice way to talk about our flt management team.

I noticed there was nothing stated in those releases about the 11 cent per share dividend. I guess they don't want "the help" getting all informed and uppity on the interweb machines.

Sure glad my reduced BLG helped create the payout. Can arbitrators spell d-i-v-i-d-e-n-d or are they on Smitty's payroll too?