FedEx Lifts Outlook as It Integrates TNT Express--Update

By Anne Steele 

FedEx Corp. increased its earnings forecast for the year as the package-delivery giant works to integrate the Dutch parcel firm TNT Express NV amid a tepid economic outlook.

The company also reported revenue and adjusted earnings for the August quarter that topped expectations, lifting shares of FedEx by 2.3% to $166.45 in after-hours trading.

FedEx bought TNT in May for nearly $5 billion. For the fiscal year ending in May, the Memphis, Tenn., company said it now expects earnings excluding TNT-related integration and other costs of $11.85 to $12.35 a share. Previously, it had forecast adjusted per-share earnings of $11.75 to $12.25.

Chief Executive Frederick Smith said the integration of TNT Express is "proceeding smoothly." He said results were strong, "especially given the global economy's continued low growth."

For the quarter ended Aug. 31, FedEx reported a profit of $715 million, or $2.65 a share, up from $692 million, or $2.42 a share, a year ago. FedEx said costs from TNT's integration and restructuring program dented earnings by 17 cents a share, while an intangible asset amortization expense for TNT shaved another 8 cents off per-share profit.

Excluding those items, adjusted per-share earnings rose to $2.90 a share. Revenue rose 20% to $14.7 billion. Analysts polled by Thomson Reuters had projected adjusted per-share profit of $2.81 on $14.61 billion in revenue.

Chief Financial Officer Alan Graf said that as FedEx continues to integrate TNT, there will be opportunities to improve earnings.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

September 20, 2016 17:55 ET (21:55 GMT)

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