September 18, 2008

FedEx Corp. said Thursday its fiscal first-quarter profit slipped 22% from a year ago on higher fuel costs and declining demand for express shipments, and said its express unit will boost rates by a net 4.9% next year.

First-quarter profit fell to $384 million, or $1.23 a share, from $491 million, or $1.58, a year ago, FedEx said in a statement.

Revenue for the quarter ended Aug. 31 rose 8% to $9.97 billion, FedEx said in a statement. It had reported a $241 million loss for the previous quarter.

Meanwhile, the company’s FedEx Express unit will raise rates by a net 4.9% next year — an average increase of 6.9% for U.S. and U.S. export services, offset by a 2% reduction in fuel surcharges.

The increase will take effect Jan. 5, and FedEx Ground’s rate increase will be announced later this year, FedEx said.

Operating income at less-than-truckload unit FedEx Freight fell 15% to $89 million, while revenue rose 10% to $1.35 billion. LTL shipments gained 4%.

Operating income at the FedEx Ground segment rose 3% to $196 million, while revenue rose 9% to $1.76 billion.

FedEx Express’ operating income plunged 34% to $345 million, while revenue gained 9% to $6.42 billion.

FedEx said its second-quarter earnings would be $1.40 to $1.60 per share, compared with $1.54 a year ago.

For the full year, it reaffirmed its estimate of $4.75 to $5.25 per share, citing “weaker global macroeconomic conditions.”

FedEx Corp. is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.

By Transport Topics