Write-downs, fuel costs drive FedEx to Q4 loss

Source: Supply Chain Digital

Date :18/06/2008 06:38:54

FedEx Corp., the second-largest US package-shipping company, has reported a fourth-quarter loss of US$241 million blaming rising fuel costs and a write-down from its struggling Kinko’s retail-store division.

The package delivery company also issued a weak forecast for fiscal 2009, which it blamed on the impact of high fuel prices on demand for its services.

FedEx, often considered a proxy for the U.S. economy, forecast a fiscal 2009 profit of US$4.75 to US$5.25 a share, below analysts’ expectations.

The company predicted it would earn 80 cents to US$1 a share this period.

Difficulties

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

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

Revenue rose eight percent to US$9.87 billion.