Ted Reed
FedEx(FDX Quote - Cramer on FDX - Stock Picks) says it will miss analysts' estimates for the current quarter and for fiscal 2009, as the continuing impact of high fuel prices and a weak economy drag on.
"We're pressured by serious economic difficulties," said CEO Fred Smith, on an earnings conference call. "Record high fuel prices and the weak U.S. economy dampened volume growth and substantially affected our bottom line." Smith added that the "economic headwinds" the company is facing this year will continue into fiscal 2009. But he noted that results during this year and next "will be anomalies" that will "hopefully set the stage for fiscal year 2010." Shares in FedEx were trading down 2.7% Wednesday at $82.02. Rival UPS (UPS Quote - Cramer on UPS - Stock Picks) was off 2% at $66.03. The package delivery company said it barely missed expectations for the fiscal fourth quarter, which ended May 31. Excluding one-time items, the company earned $1.45 a share. Analysts surveyed by Thomson Reuters had estimated $1.47. Revenue rose 8% to $9.87 billion and was nearly $300 million more than had been anticipated. In the same period a year earlier, FedEx earned $1.90 a share. Including a one-time charge of $696 million, or $2.22 a share, associated with the decision to pare back the Kinko's trade name, FedEx lost 78 cents a share. The net loss was $241 million, compared with net income of $610 million a year earlier. Looking ahead, the company said high fuel prices and the related impact on surcharges is reducing demand for its services and cutting yields. Additionally, FedEx said, earnings are difficult to predict given fuel costs that are both high and volatile and an uncertain economic outlook. The company projected first-quarter earnings of 80 cents to $1 a share; analysts were estimating $1.27.
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