FedEx Q1 Profit Misses Views, Shares Drop

Shares of

dropped over 3 percent in pre-market trading after the company reported downbeat earnings for its fiscal first quarter and lowered its forecast for the full year. The Memphis, Tennessee-based company posted quarterly net profit of $692 million, or $2.42 per share, compared to $653 million, or $2.26 per share, in the year-ago quarter. Its revenue rose to $12.3 billion from $11.7 billion. However, analysts were expecting earnings of $2.46 per share on revenue of $12.3 billion. The average estimate among 44 Estimize users was for earnings of $2.46 per share and revenue of $12.26 billion. Its operating income climbed to $1.14 billion from $1.06 billion, while operating margin expanded to 9.3 percent from 9.1 percent. Revenue at the FedEx Express segment declined 4 percent to $6.59 billion in the latest quarter, while revenue at the FedEx Ground segment climbed 29 percent to $3.83 billion. Revenue at the FedEx Freight segment declined slightly to $1.60 billion in the recent quarter, from $1.61 billion in the year-ago quarter. "FedEx Corp. is performing solidly given weaker-than-expected economic conditions, especially in manufacturing and global trade," said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. "Our profit improvement program is on track and delivering impressive results, and I am very confident FedEx is well positioned to deliver value for shareowners, customers and team members in fiscal 2016 and beyond." For fiscal 2016, FedEx now expects adjusted earnings of $10.40 to $10.90 per share, versus earlier forecast of $10.60 to $11.10 per share. FedEx shares fell 3.03 percent to $149.34 in pre-market trading.