The net loss was $876 million, or $2.82 per share, for the fourth quarter ended May 31, down from a loss of $241 million, or 78 cents a year earlier. Revenue at the Memphis-based company fell 20 percent to $7.85 billion. Excluding non-cash charges totaling about $1.2 billion, or $3.46 per share, earnings would have been 64 cents. On that basis, FedEx was expected to earn 52 cents a share on revenue of $8.4 billion, according to analysts surveyed by Thomson Reuters.
"FedEx operations performed well even with strong economic headwinds, thanks to decisive management actions to control costs and committed team members who delivered outstanding service to our customers," said FedEx CEO Frederick W. Smith, in the earnings press release. "There are signs that the worst of the recession is behind us and we remain optimistic that we will see quarter-over-quarter economic improvement later this calendar year."
Revenue from FedEx Ground fell 1 percent to $1.7 billion, while operating income was flat at $203 million. FedEx Freight posted an operating loss of $106 million. Revenue was $948 million, down 28 percent from last year's $1.31 billion. Revenue at FedEx Services fell 13 percent to $478 million.
Shares of FedEx, down about 20 percent this year, fell in pre-market trading. Wall Street sees FedEx as a proxy for the overall economy which many expect will move out of a recession by September. There are caveats, however, including predictions that unemployment will hit double-digits before Labor Day.
FedEx, which announced the layoff of 1,000 workers in April, is forecasting first quarter earnings of 30 cents to 45 cents per share, compared with $1.23 a year earlier. Wall Street had expected FedEx to earn 68 cents on revenue of $8.63 billion, according to Thomson Reuters. This outlook from FedEx "assumes current fuel prices and a stable economic environment," which given the expected rise in oil prices may be wishful thinking.
"The operating environment for our first two quarters in fiscal 2010 is expected to be extremely difficult," said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer, in the press release. "Manufacturing activity is expected to be substantially negative year over year through the summer and last year's first quarter results benefited from stronger economic activity, making earnings comparisons difficult."
The company was unable to give a forecast for annual earnings given the uncertainty about fuel prices.
