A Federal Express truck makes its way down a freeway in San Diego, California August 22, 2014.Mike Blake/Reuters
FedEx Corp. lost $70-million (U.S.) in the latest quarter because of large pension and acquisition items, and the delivery giant gave a cautious outlook for the next 12 months.
The company's fiscal fourth-quarter results Tuesday still beat Wall Street expectations, as FedEx and other delivery companies continue to benefit as consumers do more shopping online.
The growth in e-commerce, however, has strained the networks of companies like FedEx and United Parcel Service Inc. To keep up, FedEx plans capital spending of $5.1-billion in the fiscal year that just started. FedEx will use the money to expand its ground network and buy more aircraft.
FedEx said it expects earnings excluding one-time items in the new fiscal year to be between $11.75 and $12.25 per share. The midpoint of that range is less than the $12.17 per share that analysts were expecting, according to a FactSet survey.
In the fiscal fourth quarter, the loss amounted to 26 cents per share and compared with a year-earlier loss of $895-million, or $3.16 per share. Results were dragged down by a pension-accounting adjustment and costs related to the acquisition of Dutch delivery company TNT Express.
Without those and other charges, FedEx said it would have earned $3.30 per share compared with $2.66 per share a year earlier. Thirteen analysts surveyed by Zacks Investment Research expected $3.26 per share.
The Memphis, Tenn.-based company had revenue of $12.98-billion, beating the Zacks survey forecast of $12.83-billion.
Operating profit rose in both the express and ground-shipping segments, partly due to higher prices.
For the year, FedEx reported a profit of $1.82-billion or $6.51 per share on revenue of $50.37-billion.
FedEx shares were down $1.15, or about 0.7 per cent, at $162.80 in after-hours trading following the earnings release. Through the end of Tuesday's regular-session trading, they have risen 10 per cent since the beginning of the year, while the Standard & Poor's 500 index is up 2 per cent.