FedEx Cuts Earning Forecast on Dismal Global Growth
FedEx Corp., the world’s second largest package delivery company, on Thursday said it is cutting its earnings forecast for the rest of the fiscal year due to uncertainties and global economic slowdowns.
The world’s second largest package delivery company FedEx Corp. on Thursday slashed its earnings expectations for the fiscal year because of the dismal economic growth, but the firm remained confident that there will not be another recession.
In a report, FedEx said it expects earnings to hit $6.25 to $6.75 per share for the fiscal year ending May 2012, lower than the earlier estimates of $6.35 to $6.85 per share. Analysts expect the company’s earnings to be around $6.39 per share.
FedEx has cut its outlook for the fiscal year a day after the US Federal Reserve, the country’s central bank, released a gloomy forecast for the overall global economy.
Meanwhile, the freight company reported a 22 percent increase in its net income for its fiscal first quarter, which ended in August 2011. According to the company, its earnings for the quarter reached $464 million or $1.46 per share, compared with $380 million or $1.20 per share a year ago.
FedEx also said that its revenue rose to $10.52 billion, or 11 percent higher than last year – beating analysts’ expectations of $10.32 billion for the three month period.
Following the announcement of the new earnings forecast, FedEx shares fell by more than 8 percent in early trading hours, contributing to the widening market sell-off.