FedEx Corp. (FDX) - Get FedEx Corporation Report posted better-than-expected fiscal fourth-quarter earnings after the bell Tuesday, but cautioned that economic weakness and trade tensions could cut into its iconic business segment.

FedEx shares rose $2, or 1.3% to $157.98 in after-hours trading after falling 3% in the regular session Tuesday.

The company reported adjusted net income of $1.32 billion, or $5.01 a share, on revenue of $17.8 billion.

It had been expected to post net income of $1.3 billion, or $4.85 a share on revenue of $17.8 billion, based on a FactSet survey of 22 analysts.

In the same period a year ago, the company posted earnings of $5.91 a share on sales of $17.3 billion. It reported net income of $2.1 billion, based on FactSet data.

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The company said operating income for fiscal 2020 at FedEx Ground and FedEx Freight "is expected to increase due to higher revenues." However, "At FedEx Express, macroeconomic weakness and trade uncertainty, continued mix shift to lower-yielding services and a strategic decision to not renew a customer contract will negatively impact operating income."

The company forecast a "low-single-digit percentage point increase in diluted earnings per share" for fiscal 2020, before taking into account the effects of mark-to-market retirement plan accounting adjustments.

It forecast capital spending of $5.9 billion for the 2020 fiscal year.

FedEx said its fourth-quarter operating income was hurt by "lower FedEx International Priority package and freight revenues at FedEx Express, higher costs at FedEx Ground and business realignment costs primarily associated with the U.S.-based voluntary employee buyout program."

It said those negatives were partially offset by "U.S. volume growth, increased revenue per shipment at FedEx Freight and FedEx Ground, lower variable incentive compensation expenses and a favorable net impact of fuel at all transportation segments."

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