FedEx reports higher quarterly loss

WASHINGTON: US package delivery giant FedEx reported on Wednesday an 876-million-dollar quarterly loss and warned of lower earnings in the next quarter amid a recession.

Weighed down by hefty one-time charges, the loss was equivalent to 2.82 dollars per share in the fiscal fourth quarter ending May 31, compared with a loss of 241 million dollars, or 78 cents per share in the same quarter a year ago.

Excluding one-time charges, adjusted earnings were 64 cents per share, topping the consensus estimate of 51 cents per share.

The 1.2 billion dollars in charges was linked to its acquisitions of Kinko's, now known as FedEx Office, and Watkins Motor Lines, now known as FedEx National, the company said.

Revenue fell 20 percent to 7.85 billion dollars amid a tough environment.

Looking ahead, the company projected earnings of 30-45 cents per share in the next quarter compared with 1.23 dollars per share a year ago, expressing concerns over rising fuel prices.

"The operating environment for our first two quarters in fiscal 2010 is expected to be extremely difficult," said Alan Graf, FedEx chief financial officer.

"Manufacturing activity is expected to be substantially negative year-over-year through the summer and last year's first-quarter results benefited from stronger economic activity, making earnings comparisons difficult."

In addition, he said, the recent run-up in fuel prices "will have a significant negative impact on our first quarter's results."

Graf said FedEx would be poised for growth in its second half fiscal year as its cost-saving initiatives gain traction and the economy begins to improve.