FedEx lowers financial expectations due to rising oil prices
FedEx Corp. on Friday lowered its expectations for its second quarter ending Nov. 30 and for its full fiscal year due to escalating fuel costs and concerns over less-than-truckload business at FedEx Freight.
The Memphis, Tenn.-based company now expects second quarter earnings in the range of $1.45 to $1.55 per diluted share, compared to the previous forecast of $1.60 to $1.75. For the full fiscal year, FedEx now expects earnings of $6.40 to $6.70 per diluted share, down from the previous forecast of $6.70 to $7.10.
'Since we provided earnings guidance for the second quarter in September, our fuel costs have increased more than 8 percent, or $85 million,' said Alan B. Graf Jr., FedEx Corp.’s executive vice president and chief financial officer.
'While we have dynamic fuel surcharges in place, they cannot keep pace in the short-term with rapidly rising fuel prices. In addition, less-than-truckload freight trends in the FedEx Freight segment remain weak, despite economic signs that the decline in U.S. industrial production has hit bottom. We are taking prudent steps to reduce expenses, and are reviewing our capital investment plans for further reductions.'
FedEx will release its second quarter results on Dec. 20.