FedEx second-quarter profit rises, but misses expectations

[December 17, 2014]  By Nick Carey
 
 CHICAGO (Reuters) - Package delivery company FedEx Corp reported lower-than-expected quarterly profit on Wednesday as U.S. domestic package and international export volumes rose, and reaffirmed its full-year profit outlook.

Both FedEx and main rival United Parcel Service Inc are in the final days of their holiday peak season, which has boomed over the past decade due to the rise of e-commerce. Last year both companies were hit by a last-minute surge in online orders and bad weather that left an estimated 2 million packages undelivered on Christmas Eve.

The two companies have worked closely with online retailers in hopes of avoiding a repeat of last year, and so far the plans appeared to be paying off.

Memphis-based FedEx reported net income of $616 million for the second quarter ended Nov. 30, compared with $500 million a year earlier. Earnings per share came to $2.14, a 36 percent increase from $1.57 in the same quarter last year. Wall Street analysts expected $2.22.

Revenue totaled $11.9 billion, below analysts' expectations of $11.99 billion. Revenue rose in all of the company's major business segments.

FedEx said its profits got a slight boost from falling fuel prices and lower pension expenses, but those benefits were partially offset by aircraft maintenance expenses.

The company still expects earnings per share for the fiscal year ending May 31, 2015 to be in a range from $8.50 to $9.00. Analysts have predicted $9.14.

(Editing by Franklin Paul and Jeffrey Benkoe)

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