FedEx posts bigger loss, issues gloomy outlook

[June 17, 2009]  NEW YORK (AP) -- FedEx Corp. on Wednesday warned it expects earnings well below analysts' views in the next quarter, after it posted a bigger fiscal fourth-quarter loss due to hefty one-time charges.

The Memphis, Tenn.-based company's adjusted fourth-quarter results came in above expectations on Wall Street, but its stock fell in premarket trading, down $1.27, or 2.5 percent, at $50.15.

The company lost $876 million, or $2.82 per share in the three month period ending in May, compared with a loss of $241 million, or 78 cents per share a year ago.

Excluding one-time charges, earnings were 64 cents per share.

Revenue fell 20 percent to $7.85 billion.

Thomson Reuters says analysts expected profit of 51 cents per share on revenue of $8.32 billion.

FedEx issued an earnings prediction for its first-quarter well below what analysts are expecting. The company sees a profit of 30 cents to 45 cents per share for the period ending in August, compared with analysts' consensus forecast of 68 cents per share. FedEx posted a profit of $1.23 per share a year earlier.

"The operating environment for our first two quarters in fiscal 2010 is expected to be extremely difficult," executive vice president and chief financial officer Alan B. Graf Jr. said.

Graf said that still-sluggish manufacturing activity and another run-up in fuel prices will hinder earnings in the near future. But he also expects that FedEx's performance will begin to improve in the last two fiscal quarters of 2010 as cost-cutting measures start to "gain traction."

[Associated Press; By SAMANTHA BOMKAMP]

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