DETROIT–Package delivery giant and U.S. economic bellwether Fed-Ex Corp. said the next two quarters will be "extremely difficult" as the recession and higher fuel prices bite into its bottom line.
But CEO Fred Smith sees "signs that the worst of the recession is behind us."
His statement said, "we remain optimistic that we will see quarter-over-quarter economic improvement later this calendar year."
The package delivery firm posted a larger quarterly loss yesterday and an outlook below Wall Street estimates for the current period.
Its shares fell 1.4 per cent to close 72 cents lower at $50.70 (U.S.) on the NYSE. FedEx forecast earnings per share of 30 to 45 cents for the current quarter. Analysts were expecting 70 cents.
FedEx said its loss widened to $876 million, or $2.82 a share, in its fiscal fourth quarter ended May 31 from $241 million, or 78 cents a share, a year earlier.
Excluding previously announced charges of $1.2 billion from two units, the firm reported a profit of 64 cents a share.
Wall Street analysts on average had expected 51 cents per share.
The charges stem from a decline in the fair value of home office supply chain Kinko's Inc, bought in 2004 and now called FedEx Office, and Watkins Motor Lines, a trucker bought in 2006, now known as FedEx National LTL. FedEx said stringent cost-cutting had mitigated the impact of the recession.
FedEx, based in Memphis, Tenn., said its quarterly revenue was $7.85 billion, off more than 20 per cent from $9.87 billion a year ago.
Reuters News Agency
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