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June 19th, 2013 
Peter Nolan
FEDEX Corp’s fourth-quarter profit fell 45 per cent as international customers traded down to less-expensive delivery options.
Excluding charges, the results still beat Wall Street expectations. But the company’s forecast for the next 12 months was shy of Wall Street forecasts and shares fell in premarket trading.
The world’s second-largest package delivery company said on Wednesday that it earned $US303 million ($A321.08 million), or 95 cents per share, in the fourth quarter ending May 31. That’s down from $US550 million, or $US1.73 per share, a year ago.
FedEx said that excluding restructuring costs and an aircraft write-down, it would have earned $US2.13 per share, which beat analysts’ forecast of $US1.96 per share in adjusted earnings.
The company is trying to cut annual spending by $US1.7 billion by 2016. The steps include buyouts intended to reduce the work force by at least 10 per cent by May 2014.
FedEx said about 3600 employees who applied for a buyout will leave the company, with 40 per cent of those leaving on May 31.
Severance and other restructuring costs totalled $US496 million, or 98 cents per share, after taxes. The company also took a write-down of $US100 million, or 20 cents per share, as it retired 10 aeroplanes during the quarter.
For the fiscal year that started on June 1, the company forecast that adjusted earnings will grow between 7 per cent and 13 per cent, suggesting a range of $US6.67 to $US7.04 per share.
Fourth-quarter revenue rose 4 per cent to $US11.44 billion, just below analysts’ forecast of $US11.46 billion.
The shares fell 54 cents to $US98.94 in premarket trading.
Chairman and CEO Fred Smith said the company’s ground-services business remained strong and margins improved in the freight business during the fourth quarter.
“These positive developments did not fully offset tepid economic growth and customer preference for less costly international shipping services,” Smith said in a statement.
AP ld
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