News
FedEx profit and forecast disappoint, stock down
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CHICAGO, Dec 20 (Reuters) - Package delivery company FedEx Corp. reported lower-than-expected quarterly profit on Wednesday and forecast earnings in the current period below Wall Street estimates.
FedEx, whose stock fell more than 4 percent in electronic trading before the stock market opening, reported net income of $511 million, or $1.64 a share, for the fiscal second quarter ended Nov. 30, compared with $471 million, or $1.53 a share, a year earlier.
Wall Street analysts had expected $1.76 per share.
FedEx said its new labor agreement with its pilots, ratified by the pilots' union in mid-October, reduced earnings by about 25 cents a share.
The Memphis, Tennessee-based company reported robust revenue increases at its express delivery, ground delivery and freight units, but FedEx Kinko revenue fall 2 percent.
The company said it expects fiscal third-quarter earnings of $1.20 to $1.35 per share, well below analysts' average forecast of $1.54.
In a statement, however, Chief Executive Officer Fred Smith was upbeat on the company's performance during the important holiday season.
"Package volumes are solid this holiday season, and we see continued global economic growth in 2007," he said.
In pre-market trading, FedEx shares were down $3.50 at $110.50, but up from a low of $109.13.
Reuters News
December 20, 2006
Geez--new contract payrates in effect 2 months but yet we somehow pull things down? Perhaps they could have posted "FedEx profits artificially high after avoiding negotiations with workforce for last 12 consective quarters...."