FedEx profit down 30%

FedEx profit down 30%    FedEx Corp. said it had fiscal second quarter profit of $345 million, down 30 percent from last year's $493 million in the same period.
   Revenue for the period ending Nov. 30 was $8.60 billion, down 10 percent from $9.54 billion in the prior-year quarter.
   The company said revenue and earnings declined as a result of lower yields, primarily due to a substantial decline in fuel surcharges year over year. Shipment growth, particularly in international express and at FedEx Ground, and strict cost controls benefited results.
   Looking forward, FedEx said it expected earnings per share in the third quarter of 50 cents to 70 cents per diluted share compared to 31 cents per share in the same period last year. It projected the increase because of the current market outlook for fuel prices and a continued modest recovery in the global economy.
   'Our balance sheet is strong, volumes are growing, and we are encouraged by our performance as we emerge from the worst economic downturn in FedEx history,' said Alan B. Graf Jr., FedEx Corp. executive vice president and chief financial officer.

Graf

   With an outlook for modestly improving economic conditions and business performance, FedEx will resume merit salary increases for calendar 2010 as well as a 50 percent resumption of the 401(k) company match for most U.S. employees. These programs were suspended a year ago.
   The company said different segments had mixed results:
   ' FedEx Express had revenue of $5.31 billion, down 13 percent from the prior year. U.S. domestic average daily package volume increased 4 percent. FedEx International Priority average daily package volume increased 6 percent.
   ' FedEx Ground segment revenue was $1.84 billion, up 3 percent from last year. Daily package volume was up 4 percent. FedEx SmartPost average daily volume grew 63 percent, aided by gains from DHL's exit from the U.S. domestic package market.
   ' FedEx Freight segment reported revenue of $1.07 billion, down 11 percent. Less-than-truckload yield decreased 12 percent “due to the continuing effects of a competitive pricing environment and lower fuel surcharges.”
   ' FedEx Services, which included operations of FedEx Office, was down 12 percent.