In a bad sign for Memphis and the U.S. economy, FedEx today reported lower quarterly earnings than a year ago. "High fuel prices and weak U.S. economic growth year over year have impacted our business," said Frederick W. Smith, FedEx chairman, president, and CEO. "We continue to benefit from solid international growth, which helps mitigate softness in U.S. industrial production. While we see challenging near-term economic trends, we remain confident about long-term prospects in all our business segments."
The company earned $1.54 per share for the second quarter ended November 30th, compared to $1.64 per share a year ago.
Revenue was $9.45 billion, up 6 percent from the previous year. Operating income of $783 million was down 7 percent, net income of $479 million was down 6 percent, and operating margin of 8.3 percent was down from 9.4 percent.
Total combined average daily package volume in the FedEx Express and FedEx Ground segments grew 8 percent year over year for the quarter, due to growh in ground and international priority shipments.
For the third quarter, FedEx expects earning to be $1.15 to $1.30 per share, compared to $1.35 per share a year ago. The capital spending forecast has been reduced from $3.5 billion to $3.1 billion, "with additional reductions possible as management continues to review the timing of capital outlays," the company said in a press release.
Following the announcement of earnings, FedEx stock was lower on Thursday by just over $1 to $93 a share, which is near its 52-week low of $91.