FedEx Affirms Guidance

The shipper says a second-quarter charge will not affect previous guidance.

Author:: TSC Staff
Publish date:: Nov 12, 2004 8:31 AM EST

FedEx

Friday affirmed second-quarter earnings forecasts.

The shipper gave the guidance update in announcing that it would take a $48 million charge in the quarter, relating to a claim for compensation under the Air Transportation Safety and System Stabilization Act.

The company held to its previous EPS guidance of $1.10 to $1.20.

In the case, the Department of Transportation ruled FedEx was entitled to $72 million of compensation. "Because FedEx Express had previously received $101 million under the Act, the D.O.T. has demanded repayment of $29 million," the company said.

The charge represents a repayment of $29 million to the D.O.T. and the write-off of a $19 million receivable.

In September, the company announced net income of $330 million in its first quarter, up from $128 million a year ago. On a diluted basis, excluding all charges, the company said earnings came in at $1.08 a share, matching Wall Street expectations. Revenue came in at $6.8 billion, up 23%.

Shares closed at $94.80 Thursday, just off their 52-week high.