Package giant Federal Express Corp. has reported its earnings for its fourth quarter ending May 31 will be in the range of $0.50 to $0.60 per share, down from $0.85 per share during the same period last year – which would represent a drop of between 30% and 40%.
“Deteriorating economic conditions and the rapid decline in the high-tech and other durable goods industries have increasingly affected FedEx volumes,” said Alan B. Graf, Jr., the company’s executive vp and CFO.
Graf said that in April, U.S. domestic average daily volume at FedEx Express declined 9% year-over-year. Additionally, the growth rate of FedEx International Priority shipments slowed to 1% year-over-year. FedEx Ground package volume grew about 5%, while package yields at both FedEx Express and FedEx Ground continue to show solid growth, he said.
Graf added that FedEx expects the economic softness to continue into its fiscal 2002, which begins June 1, 2001.
“Although we are taking steps to substantially reduce expense and capital spending, we nonetheless expect our first-quarter earnings will be significantly below last year's $0.58 per share,” he said.