MEMPHIS ( TheStreet) -- FedEx (FDX - Get Report) beat fourth-quarter estimates but could not entirely shake the impact of declining package volumes from Asia. It guided toward lower-than-expected results for the current quarter with full-year earnings at the high end of estimates.
Excluding items, the overnight package delivery company earned $550 million, or $1.99 a share, in the fiscal fourth quarter ended May 31. Analysts surveyed by Thomson Reuters had estimated $1.94. Revenue rose 3% to $11 billion. Analysts had estimated $11.1 billion.
With items, including a previously announced non-cash impairment charge related to aircraft retirements at FedEx Express, the company earned $1.73 a share. In the same quarter a year earlier, earnings totaled $1.75 a share.
Looking ahead, the company projected fiscal first-quarter 2013 earnings between $1.45 and $1.60 a share, and fiscal full-year earnings between $6.90 and $7.40. Analysts were estimating $1.70 a share for the first quarter and $7.39 for the full year. The guidance does not include the impact of ongoing cost reduction programs, the company said, and assumes U.S. gross domestic product growth of 2.2% and world GDP growth of 2.6% during the fiscal year."We are focused on improving margins in all businesses, although we face certain cost increases in fiscal 2013," said Chief Financial Officer Alan Graf, in a prepared statement. "These headwinds include higher employee-related costs, including higher pension expenses of approximately $150 million due to a historically low discount rate on our May 31, 2012 measurement date, as well as higher depreciation costs. We expect to mitigate these challenges by reducing costs and improving efficiencies, and are continuing to evaluate additional actions to substantially improve FedEx Express margins." In premarket trading, shares were down $1.51 to $87. At FedEx Express, which had first-quarter revenue of $6.8 billion, operating income fell to $281 million from $429 million, and margin fell to 4.1% to 6.5%, primarily reflecting declining package volumes from Asia. At FedEx Ground, operating income rose 18% to $494 million, margin rose to 20% from 18.4% and revenue rose 9% to $2.5 billion. At FedEx Freight, operating income rose 93% to $81 million, operating margin rose to 5.8% from 3.2% and revenue rose 7% to $1.4 billion. -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed >To follow the writer on Twitter, go to http://twitter.com/tedreednc.