FedExShipping company FedEx (FDX), often viewed as a bellwether for the economy, reported that its fiscal first quarter earnings more than doubled to $380 million, or $1.20 per share, from $181 million, or 58 cents per share, it earned a year ago. But results were a penny shy of analyst expectations and shares fell nearly 3% in premarket trading.

"Strong demand for our services resulted in higher volumes and better revenue per shipment at FedEx Express and FedEx Ground," said Chairman, President and CEO Frederick Smith. "This increased demand comes from improved global economic conditions," he added, as well as the improvements the company made during the downturn.

In its fiscal 2010 first quarter ended August 31, FedEx revenue jumped 18% to $9.46 billion from $8.01 billion the previous year. Also, it reported operFating margin of 6.6%, up from 3.9% the previous year.

1,700 Workers Are Out of Luck

FedEx said the strong earnings were the result of strong FedEx International Priority growth at FedEx Express, continued growth at FedEx Ground and a benefit from the net impact of higher fuel surcharges. But expenses related to employee compensation programs, pension, and medical cost, as well as aircraft maintenance expenses, and an operating loss at FedEx Freight dampened the quarter's solid results.

The company also announced that it would combine its FedEx Freight and FedEx National LTL operations effective January 30, 2011 to increase efficiencies and reduce operational costs. While FedEx said this would significantly improve profitability in the segment by 2012, the move will also result in 1,700 job cuts as it shuts 100 facilities.

Going forward, FedEx raised its projected earnings in the second quarter to $1.15 to $1.35 per share in the second quarter, but that was still below analyst estimates of $1.37. FedEx also raised earnings for fiscal 2011 to a range of $4.80 to $5.25 per share, up from the company's previous estimate of $4.60 to $5.20 per diluted share.

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hunkymon

It's not just the Postal Service. It's Fed Ex too!

August 13 2012 at 10:45 PM Report abuse rate up rate down Reply
Daytodaytruckers

Fedex has lead the attack on unionized trucking companies from day one. Never paying equal wages, no pension and lousy working conditions, not to mention their holding on to a long anti-union tactic to weed out anyone who stands against them in thier daily operations with the at-will employee hiring they have always maintained. Which means they have to give no reason at all to fire you. Failing to bargain with unions or hear employees grievances has given them an unfair advantage that has caused almost complete elimination of the great union carriers that gave better working conditions, a grievance procedure for workers to be heard, great pensions that allow retirement at almost full wages at a much earlier age than social security, and the best medical and dental benefits with little or no co-pay. They hide behind a government entity called the Railway Labor Act, and not party to the National Labor Relationions Board that all the trucking companies are under. That makes it impossible for any union to organize them. The RLA forces the unions to organize the whole company at one time instead of one facility at a time as under the NLRB. A union would have to hire over 2,000 organizers to do such a national one vote campaign. The education of todays workers is also eliminated from todays school curriculums. Most kids today don't even know what a union is, let alone who the Teamsters are who died and fought to bring a solid middle class to our country. Now the unions are almost gone, and coincidentally so are the great middle class union jobs. Now everyone is being screwed by the big business owners. Their plan all along. You may see Americas workers bring back the unions again, but only after they have suffered much more. So the kids coming out of school now really don't have a chance of ever retiring. Even social security is almost broke due to the abuse and misuse by our own government. The governement who passed laws in the 30's to give unions a fair chance to organize. Now those laws are almost eliminated due to the constant battle and destruction led by again the big business owner. I'm retired and enjoying a nice retirement and was able to do so at 51 with almost full wages. Do you see anyone entering the job market today with such a hope. The false promise that 401K plans were going to help sure flopped didn't it. Even the collapse of the housing market and values has hurt more than just the average American. We area all paying for the corruptions led by big business and banks. If you think people will continue and not fight the rich in this country are in for a bigger surprise than they expect. When the fighting starts I will be in the trenches assisting and lending my organizing skills to hit them where it hurts the most. They will not be able to hide behind their walls forever. They will have to poke their heads out sometime. I don't know about you but no amount of money is enough to keep me locked up behind a wall living in fear of attack by the average man. It is coming to that very soon. Just sit back and watch if you dare. Not getting involved will soon not be a choice. Just the opinion of a former International Teamster Organizer

September 21 2010 at 11:32 PM Report abuse rate up rate down Reply
Fred

But we are out of the recession.

September 21 2010 at 11:06 PM Report abuse rate up rate down Reply
izma

I could have predicted their eventual demise since they don't advertize What happens when you don't advertize "nothing"

September 21 2010 at 8:43 PM Report abuse rate up rate down Reply
llwlknsn

Instead of rewarding the people who make FEDEX work,this company will shove them out of the door. I do not get business anymore. It is time for a radical shift in how our government supports naked gutting for profit. The Covenant is broken between business and the American employee. It is time we sent people to Washington who will cut subsidies to companies who shed workers for little more than book keeping tricks.

September 21 2010 at 8:02 PM Report abuse rate up rate down Reply
1 reply to llwlknsn's comment
sramos0913

Great comment and so true. We are deserting our workers for the stockholders. Doesn't anyone understand this will weaken the economy?

October 11 2012 at 2:14 PM Report abuse rate up rate down Reply
nconstinc

Sure, thats not enough money for the board and its shareholders! Lets lay off the hard working Americans so you can give yourself all raises! MORONS! I would Never use Fed ex again, GO UPS!

September 21 2010 at 4:25 PM Report abuse +2 rate up rate down Reply
joyce

Wait a minute! Fed X can't do that...Obama said the recession was over!!

September 21 2010 at 3:48 PM Report abuse +2 rate up rate down Reply
jgoetz9174

I believe if you read the article again you will see that they mentioned employes compensation, medical care costs and pensions along with higher airplane maintenance costs as being the problems causing the layoff of employes. This sounds almost like GM and Chrysler. Someone mentioned cutting the salaries af the corporate bosses. Well, remember, you get what you pay for. Look at GM. They still owe the people of America more that 60 billion dollars, but they're going strong and changing CEO's like they are going out of style...FEDEX will soon be given a visit by Geithner et al. Geithner will fix them.

September 21 2010 at 11:19 AM Report abuse rate up rate down Reply
2 replies to jgoetz9174's comment
nconstinc

Geithner doesnt give a crap, hes got his own cushy job. Americans have to stick together and boycott this type of treatment. And any American company that is sending OUR jobs overseas. BUY made in AMerica only, its worth the extra money to cram it down greedy companies throats! NOW THATS CHANGE

September 21 2010 at 4:28 PM Report abuse +1 rate up rate down Reply
llwlknsn

Would slavery work for you? Because I am sure American business will not stop gutting the American workforce until all employees work for free.

September 21 2010 at 8:05 PM Report abuse rate up rate down Reply
mscowby

Here is who is to balme for the layoffs, for the most part----------------------------W ho ever over bid UPS for the Government contracts needs to be fired..., UPS not handels a tremendous amount of the Federal Government packages and I mean millions. UPS did nto have that account but FED X in all thier greed and wisdom handed that account to UPS on a silver platter

September 21 2010 at 10:59 AM Report abuse +1 rate up rate down Reply
LunnaTick

Why not cut the CEOs' salaries in half, instead of laying off workers.

September 20 2010 at 10:19 PM Report abuse +4 rate up rate down Reply