FedEx pares outlook despite rise in profit

FEDEX, the world’s second biggest package delivery company, last night reported a higher quarterly profit that slightly beat forecasts but pared its outlook for the full year, citing fuel prices and moderate global economic growth.

Analysts had expected the company to lower its earnings guidance based on a tepid domestic economy and slower international trade than many expected.

Businesses continue to keep a lean inventory based on consumer sentiment, heightening the focus on cost controls as well as rate increases to boost profits.

FedEx said its ground and freight results offset the impact of slowing economic growth, which stifled volumes, and announced more rate increases.

“The US and global economy grew at a slower rate than we anticipated during the quarter,” Alan B Graf, FedEx chief financial officer, said.

At FedEx Express, the largest division representing more than 60 per cent of revenue, domestic revenue per package rose 13 per cent even as average daily package volume dropped three per cent.

FedEx said its fiscal first-quarter profit was $464m (£302.6m), compared with $380m a year ago.