FedEx Lowers Annual Profit Guidance After Quarterly Results Miss Target

By Maria Armental 

FedEx Corp. on Tuesday cut its profit projection for the year, but the package-delivery giant expects investments in its ground operations to pay off over the next three years.

FedEx said it now expects to make $10.80 to $11.30 a share in adjusted profit, down from its earlier view of $10.95 to $11.45 a share. The company also cut its capital spending forecast by $300 million to $5.3 billion.

Over all, third-quarter profit rose 11% to $562 million, or $2.07 a share. Excluding integration and restructuring costs tied to the acquisition of TNT Express, profit rose to $2.35 a share from $2.51 a share.

Meanwhile, revenue rose 18% to $15 billion.

Analysts surveyed by Thomson Reuters had projected $2.62 a share in adjusted profit on $14.99 billion in revenue.

Shares, up 17% over the past 12 months, fell 3.6% to $185 in after-hours trading.

Dutch package-delivery company TNT Express gave FedEx an established ground network in Europe, adding to its already sizable air-express delivery operations there.

By the 2020 fiscal year, FedEx expects the integration of TNT Express, fleet upgrades, and rising e-commerce volumes to add between $1.2 billion and $1.5 billion to operating income of its Express group.

Write to Maria Armental at [e-mail]

(END) Dow Jones Newswires

March 21, 2017 17:32 ET (21:32 GMT)

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