FedEx reports Q4 loss; forecasts lower profit

Source: Exec Digital USA

Date :18/06/2008 06:33:05

FedEx Corp, the second-largest US package-shipping company, reports a fourth-quarter loss; issues a weak forecast for fiscal 2009.

The package delivery company, often considered a proxy for the U.S. economy, reported a loss of US$241 million, blaming rising fuel costs and a write-down from its struggling Kinko’s retail-store division.

Revenue rose eight percent to US$9.87 billion.

Difficult environment

FedEx also deliver a disappointing outlook for this year’s results, which fell short of analysts’ expectations.

It forecast a fiscal 2009 profit of US$4.75 to US$5.25 a share, which it blamed on the impact of high fuel prices on demand for its services. The company predicted it would earn 80 cents to US$1 this period.

Expenses, Cash flow

Alan Graf, Chief Financial Officer said the coming year will be ``very difficult due to the weak US economy and extremely high fuel prices''. He said the company would “focus on reducing expenses and remaining cash flow positive”.

FedEx, whose capital expenses totalled US$2.9 billion in fiscal 2008, aims to spend less than US$3 billion again this year.