MEMPHIS, TENN. (
(FDX - Get Report)
beat Wall Street's earnings estimates despite slow economic growth.
Excluding items, the company profit of $679 million, or $2.13, a share in the fiscal fourth quarter ended May 31. Analysts surveyed by Thomson Reuters had estimated $1.96. Revenue was $11.4 billion, in line with estimates.
With items, FedEx earned $303 million, or 95 cents a share. Items included a charge of 98 cents a share related to a "business realignment program change" involving 3,600 voluntary separations, and a charge of 20 cents a share for related to aircraft retirements.
"FedEx Ground posted another strong year and FedEx Freight margins continued to improve," said CEO Fred Smith, in a prepared statement. "These positive developments did not fully offset tepid economic growth and customer preference for less costly international shipping services."
At FedEx Express, fourth-quarter revenue rose 3% to $6.98 billion, while adjusted operating income rose 11% to $460 million and adjusted operating margin rose to 6.6% from 6.1%. The company said demand shifted toward lower yielding international services. During the quarter, the unit took a noncash impairment charge of $100 million as it retired 10 aircraft and related engines. Graf said FedEx express will further decrease capacity between Asia and the U.S. in July.
At FedEx Ground, revenue rose 12% to 2.78 billion and adjusted operating income rose 13% to $557 million.
Looking ahead, the company projected full-year 2014 earnings per share growth between 7% and 13%, based on an assumption that U.S. gross domestic product will grow 2.3% and world GDP will grow 2.7%.
"We remain focused on improving margins and returns in all of our businesses. The pace of that improvement is expected to be moderate in fiscal 2014 and then accelerate in fiscal 2015," said Chief Financial Officer Alan Graf, in a prepared statement.
-- Written by Ted Reed in Charlotte, N.C.
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