FedEx Q2 Profit Rises, Yet Misses Estimates; Lifts FY EPS Growth View

(RTTNews) - Package delivery giant FedEx Corp. (FDX) reported that net income for the second quarter ended November 30 was $500 million, up 14% from last year's $438 million. Quarterly earnings grew to $1.57 per share, from $1.39 per share last year. Analysts polled by Thomson Reuters expected the company to report earnings of $1.64 per share for the quarter. Analysts' estimates typically exclude special items.

Last year's second quarter results were impacted by $0.11 per share due to the effects of Superstorm Sandy.

"FedEx posted solid second-quarter earnings, reflecting improved performance at FedEx Express, as the profit improvement plan introduced more than a year ago continues to gain momentum," said Frederick Smith, FedEx Corp. chairman, president and chief executive officer.

Operating income was $827 million, up 15% from $718 million last year. The company reports Operating margin of 7.3%, up from 6.5% the previous year. Operating income and margin increased primarily due to yield and cost management at FedEx Express. Results also benefited from the favorable comparison to last year's Sandy-impacted results, lower pension expense and a modest benefit from the voluntary employee severance program.

Revenue for the quarter was $11.4 billion, up 3% from $11.1 billion the previous year. Twenty analysts estimated revenues of $11.43 billion for the quarter.

FedEx increased its forecast of fiscal year 2014 earnings per share growth to 8% to 14% above last year's adjusted results, compared to its previous growth range of 7% to 13%. This outlook reflects share repurchases made to date but does not include any benefit from additional share repurchases. The outlook also assumes the market outlook for fuel prices and continued moderate economic growth. The capital spending forecast for fiscal 2014 remains $4 billion. Analysts project annual earnings per share of $7.03.