FedEx profit hit by high oil, slow economy

FedEx profit hit by high oil, slow economy
3/20/08

MEMPHIS, Tenn. - FedEx Corp. reported a 6 percent drop in third-quarter earnings Thursday due to high oil prices and a slow U.S. economy, and indicated it would miss Wall Street forecasts for the fourth quarter.
The shipping company said its fourth quarter earnings would fall from a year ago and said it expects only limited earnings growth for its next fiscal year.
As we survey the current economic landscape, we expect limited earnings growth in (2009), given the current outlook for macro-economic conditions and fuel prices, Chairman and CEO Frederick W. Smith told market analysts in a conference call.

There is clearly stress in the housing and financial sectors and they create a drag on the overall U.S. economy, as well as the fuel prices, Smith said, also noting an apparent softening in the labor market. In calendar year 2008 we expect U.S. GDP to grow more slowly than in 2007.

FedEx, which is often seen as a bellwether for the U.S. economy, expects that the international economy will continue to expand overall, albeit at a slower rate, Smith said. And this will be fueled by the emerging markets.

FedEx said it earned $393 million, or $1.26 a share, in the three months ended Feb. 29 versus $420 million, or $1.35 a share, for the same period last year. Revenue rose 10 percent to $9.44 billion, from $8.59 billion.
Analysts with Thomson Financial expected earnings of $1.22 a share on revenues of $9.11 billion.
http://www.msnbc.msn.com/id/23723005/
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