05.10.2008
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| FedEx lowers 4th-quarter forecast, blames high cost of fuel, weak shipping demand
FedEx lowers 4th-quarter forecast, blames high cost of fuel, weak shipping demand 5/10/08 Quote: MEMPHIS, Tennessee — FedEx Corp. cut its fourth-quarter earnings expectations Friday, blaming continuing increases in fuel costs.
The Memphis-based shipping company said it expects profits of $1.45 (euro.94) to $1.50 (euro.97) per share for the three months ended May 31, down from its previous prediction of $1.60 (euro1.04) to $1.80 (euro1.16) per share.
Analysts surveyed by Thomson Financial predicted quarterly earnings of $1.69, down from earlier expectations of $1.95 (euro1.26).
"Since we provided earnings guidance for the fourth quarter in March when the crude oil price was slightly above $100 per barrel, our estimated fuel costs for the quarter have increased more than 7 percent, or $100 million from our previous estimate," said FedEx Chief Financial Officer Alan B. Graf Jr.
FedEx customers pay surcharges to help offset fuel costs, but "they cannot keep pace in the short-term with rapidly rising fuel prices," Graf said.
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