FedEx Corp., the global shipping service provider, said Tuesday it expects the operating environment in the next two quarters to be “extremely difficult,” expecting manufacturing to be negative through the summer and higher fuel prices to have a significant impact.
The company wouldn’t commit to a full year forecast in a statement released today reporting its fourth quarter results, saying the company does not have “enough visibility into the economic recovery and jet fuel prices” to provide a meaningful forecast.
However, we believe that FedEx will be poised for growth in our fiscal second half, as our many cost-saving initiatives gain traction and the economy begins to improve,” said the firm’s chief financial officer and executive vice president Alan B. Graf, Jr.
The company said its operating performance continued to be restrained by the global recession, resulting in lower shipment volumes at its FedEX Express and FedEx Freight lines.
Revenue was also impacted by reduced fuel surcharges and lower shipment weight. The company said these declines were partially offset by cost control efforts and market share gain in parcels delivery.
Fiscal 2009 4th Quarter
Revenue in the quarter was $7.85 billion, down 20 percent from $9.87 billion a year ago. The company’s operating loss was $849 million, compared to a loss of $163 million last year. The net loss was $876 million, down from a loss last year of $241 million.
Full year fiscal 2009
For the full year, the company had revenues of $35.5 billion, down 6 percent from $38.0 billion in the previous year. Net income was $98 million, down 91 percent from last year at $1.13 billion. Earnings per share for the full year was $0.31, also down 91 percent from $3.60 the previous year.
Outlook for share performance
Looking ahead to the first quarter, the company expects earnings in a range between $0.30 and $0.45 per diluted share, compared with $1.23 per diluted share a year ago.
FedEx Express segment
Revenues were $4.80 billion for the year, down 25 percent from $6.37 billion a year ago. It’s operating loss was $136 million, slipping from a gain of $426 million last year. It’s operating margin was 2.8 percent, falling from 6.7 percent last year.
FedEx Ground segment
Revenue was $1.70 billion, down 1 percent from $1.72 billion. Operating income was $203 million, the same as last year. Operating margin was 11.9 percent, up from 11.8 percent a year ago.
FedEx Freight segment
Revenue was $948 million, down 28 percent from $1.31 billion. The segment had an operating loss of $106 million, down from a $99 million gain a year ago. Operating margin was 11.2 percent, down from 7.6 percent last year. The operating loss includes a $90 million impairment charge from the Watkins Motor Lines acquisition.
FedEx Services segment
FedEx Services fourth quarter segment revenue, which includes the operations of FedEx Office and FedEx Global Supply Chain Services, fell 13 percent year over year due to declines in copy product revenues. The results included an $810 charge related to the acquisition of Kinko’s.