FedEx Corporation (NYSE:FDX)’s stock opened sharply lower on Wednesday after the American global courier delivery services company reported its financial results for the first quarter of fiscal 2016 and modestly trimmed its full-year outlook, mainly due to weaker less-than-truckload shipping (LTL) demand and higher than expected self-insurance reserves and operating costs in its ground segment.
The Memphis-based company reported a net profit of $692 million or $2.42 per share, up by 6% on the year, with revenue coming in at $12.3 billion, up from $11.7 billion delivered a year earlier. However, the results fell short of expectations of earnings of $2.46 per share on revenue of $12.3 billion.
FedEx also said it expects EPS for fiscal 2016 to be in the range of $10.40 to $10.90, modestly lower than its previous guidance of $10.60 to $11.10. The outlook assumes moderate economic growth and excludes any operating results or costs related to TNT Express. FedEx Corporation (NYSE:FDX) executive vice president and chief financial officer Alan B. Graf, Jr. said that the company still expects strong earnings growth this year as it continues to execute its profit improvement program, leverage its e-commerce growth and enhance revenue quality.
A day before releasing its first-quarter results, FedEx Corporation (NYSE:FDX) announced it would raise shipping rates at its FedEx Express, FedEx Ground and FedEx Freight shipments starting January 4, 2016. Starting November 2, FedEx said, it will also increase the surcharges for shipments that exceed the published maximum dimensions in the FedEx Ground Network.
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