Package delivery company FedEx Corp on Wednesday reported a profit and gave a quarterly forecast that missed expectations, citing slowing US economic growth, but a solid full-year outlook sent its stock up more than 2 percent.
"The weakened industrial sector is currently limiting demand for transportation services," Chief Executive Officer Frederick Smith said in a statement. "But we expect the US economy to begin to show modest year-over-year improvement in the late summer to early fall time frame."
The Memphis, Tn.-based company said net income for its 2007 fiscal fourth quarter ending May 31 rose 7 percent to $610 million, or $1.96 a share, compared with $568 million, or $1.82, a year earlier. FedEx said the results included a gain from a settlement with Airbus related to its A380 order cancellation of approximately 6 cents a share. Excluding that gain, FedEx's quarterly earnings came in below the $1.96 per share expected by Wall Street analysts, according to Reuters Estimates.
The company said domestic US daily package volumes were down 1 percent in its express delivery unit, but said international package volumes rose 3 percent in the quarter. Package volumes at FedEx's ground delivery unit were up 8 percent.