FedEx swings to fourth-quarter loss

MEMPHIS: FedEx Corp reported a fourth-quarter loss on Wednesday that missed Wall Street expectations and it offered a gloomy outlook for its shipping business that showed how much higher fuel prices are eating into profits.

Considered a bellwether for the broader US economy, the FedEx earnings forecast fell well below Wall Street expectations, and its shares fell 3 percent, or $2.59, to $81.74 at the open of trade.

FedEx sees 2009 earnings of $4.75 to $5.25 per share. Wall Street had predicted $5.92 per share. The package delivery company expects to earn 80 cents to $1 per share in the first-quarter. Analysts forecast $1.27 per share.

The international package shipper posted a fourth-quarter loss of 78 cents a share, or $241 million, compared with a profit of $610 million, or $1.96 per share, for the same period last year. Excluding one-time charges, FedEx earned $1.45 per share.

Revenue rose 8 percent to $9.87 billion from $9.15 billion a year earlier. Analysts polled by Thomson Financial expected $1.47 per share on revenue of $9.6 billion.

"Record high fuel prices and the weak US economy dampened volume growth and substantially affected our bottom line ... We will continue to reduce expenses to match volume and revenue expectations," FedEx chairman Frederick W Smith said in a statement.

Fourth-quarter earnings included a one-time charge of $891 million for the expected costs of renaming the company's office service and copying division from FedEx Kinko's to FedEx Office.

FedEx had predicted fourth-quarter earnings of $1.45 to $1.50 a share. That projection was lowered from earlier company guidance of $1.60 to $1.80 a share, due largely to rising fuel costs.