FedEx Profit Falls in Wake of Super Storm

by Christopher Freeburn | December 19, 2012 10:02 am

[1]A weak economy and the lingering effects of Hurricane Sandy dampened quarterly profits[2] at FedEx (NYSE:FDX[3]).

The shipping giant reported that it eared $438 million during its fiscal second quarter, down 12% from $497 million in the same period last year. Adjusted EPS came in at $1.50 a share, which beat the $1.41 a share Wall Street had anticipated, Reuters noted.

Shares of FedEx rose more than 2% in Wednesday morning trading.

Quarterly revenue increased to $11.1 billion, up 4.7% from last year and topping analysts who had estimated $10.84 billion in revenue.

FedEx estimated that shipping delays and lost business resulting from Sandy, which slammed coastal areas of New York, New Jersey and Connecticut in late October[4], trimmed unadjusted quarterly earnings by 11 cents a share.

Operating profits at its air express unit plunged 33% compared to last year, as customers chose for cheaper, slower shipping options. Rival UPS (NYSE:UPS[5]) has also experienced a decline in customer selecting premium shipping services due to the weak economy[6].

The company reiterated its earlier estimate of earnings between $6.20 and $6.60 a share for fiscal 2013.

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