It News: FedEx Says Economy Is Worsening, Cuts Outlook

September 18, 2012

FedEx Says Economy Is Worsening, Cuts Outlook

By: AP With CNBC.com | 18 Sep 2012

FedEx said the global economy is worsening and it's again cutting its forecast for the fiscal year ending in May.
The company said it also expects net income for the current quarter ending in November to fall well below last year's quarter.

For the full year, the Memphis, Tenn., company now expects to earn between $6.20 and $6.60 per share, compared with a previous forecast of $6.90 to $7.40 per share.

For the current quarter, FedEx sees earnings of $1.30 to $1.45 per share, compared with $1.57 per share last year. Both predictions are well under analysts' forecasts.

In the three months that ended in August, FedEx reported earnings of $1.45 per share, down from $1.46 a share in the year-earlier period. That hit the top end of its recently lowered estimate.

Revenue was $10.79 billion, an increase from $10.52 billion a year ago.

After the earnings announcement, the world's second-largest package delivery company's shares fell in trading before the opening bell. (Click here to get real-time quotes for FedEx.)

Analysts had expected the company to report earnings excluding items of $1.40 a share on $10.70 billion in revenue, according to a consensus estimate from Thomson Reuters.

FedEx Express also said it would boost shipping rates by an average of 3.9 percent.