FedEx doubles quarterly profit, plans job cuts
The company increased its fiscal-year outlook, but weaker profit margins in its core Express and Ground segments and a soft second-quarter forecast made investors nervous. The company also plans to cut 1,700 jobs and close facilities as it combines its freight businesses.
“We expect a phase of somewhat slower economic growth,” said Chairman and Chief Executive Fred Smith. “The recovery began a year ago, and we believe slower growth is consistent with historical business cycles.”
Shares of FedEx (FDX 82.75, +0.03, +0.04%) fell nearly 3% to $83.47. The stock has bounced around over the past 52 weeks, falling just below $70 in July and trading as high as $97.75 in April as investors tried to gauge the state of the recovery.
FedEx shares are up about 6% over the past year. Over the same time frame, the benchmark S&P 500 Index (SPX 1,125, -0.41, -0.04%) rose 4.8%.
For the quarter ended Aug. 31, FedEx said earnings jumped to $380 million, or $1.20 a share, from $181 million, or 58 cents a share, in the year-earlier period. Sales rose 18% to $9.46 billion.