Home » 3PL/4PL, Breaking News » FedEx Q3 earnings eroded by bad winter weather

snow stormEarnings of FedEx Corp. for the third quarter ended February 28, 2013 were badly hurt by heavy winter storms, causing the global logistics group to slash its fiscal-year profit prediction.

Lower-than-expected earnings for the third quarter reached US$1.23 per diluted share compared to $1.13 per share year-over-year.

“Historically severe winter weather significantly affected our third-quarter earnings,” said Frederick Smith, group chairman and chief executive officer.

“Unusually severe winter storms throughout the quarter disrupted operations, decreasing shipping volume and increasing costs, and impacted year-over-year operating income by an estimated $125 million,” a company statement added.

FedEx reported revenue of $11.3 billion for the third quarter, up 3 percent from the previous year. Operating income was $641 million, an increase of 9 percent, while net income amounted to $378 million, higher by 5 percent from last year’s $361 million.

The group has lowered its full-year earnings forecast due to the impact of the severe weather disturbances, said Alan Graf, Jr., FedEx executive vice president and chief financial officer. The company projects earnings to be $2.25 to $2.50 per diluted share in the fourth quarter and $6.55 to $6.80 per diluted share for fiscal 2014.

“While severe winter weather often affects our third-quarter results, the impact from multiple severe storms and frigid temperatures was significantly more pronounced this year and we are reducing our full-year earnings per share guidance as a result of the weather impact,” he added.

He continued: “The $1.6 billion profit improvement plan at FedEx Express remains on track despite the near-term impact of weather. Our accelerated stock repurchase program initiated in January reflects our confidence in achieving our financial goals.”

Photo: Kevin Burkett

No comments yet... Be the first to leave a reply!

Leave a Reply

Your email address will not be published. Required fields are marked *

1 × 5 =