FedEx Posts Profit Dip but Wins in Court
FedEx Corp., the world’s No. 1 air express-package shipper, on Wednesday posted a 4% decline in fiscal third-quarter profit, in line with Wall Street forecasts, as the economic downturn cut into demand for its freight services.
Separately, a federal judge upheld the company’s $6-billion no-bid contract with the U.S. Postal Service.
The decision came in a lawsuit by CNF Inc., parent of Emery Worldwide, challenging the agreement in which FedEx will haul the postal service’s Express Mail, Priority Mail and some first-class mail. Emery has a contract for a portion of mail in the priority and express categories.
“We continue to believe that awarding the contract without competition was illegal,” said James Allen, vice president of CNF.
Allen said the company is considering its legal options in light of the ruling by Judge Christine Miller of the U.S. Court of Appeals for the Federal Circuit.
In its earnings report, FedEx said net income fell to $109 million, or 37 cents a share, for its fiscal quarter ended Feb. 28, from $113 million, or 39 cents, a year ago. Analysts expected 36 cents, according to First Call/Thomson Financial. Revenue rose 7% to $4.8 billion.
FedEx also said it expects fourth-quarter earnings to be in the low range of analyst expectations.
FedEx shares rose $2.25 to close at $42.60 on the New York Stock Exchange.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
* Pasadena-based construction-materials maker Ameron International Corp. reported fiscal first-quarter net income of $1.6 million, or 41 cents per share, compared with $951,000, or 24 cents, a year ago. Sales were flat at $121.6 million.
* Carnival Corp, the world’s biggest cruise group, said fiscal first-quarter profit fell 25% to $128 million, or 22 cents a share, beating analysts’ forecasts by 2 cents. Revenue grew 22% to $1 billion.
* Kaufman & Broad Home Corp. said fiscal first-quarter earnings fell 60% to $25.8 million, or 70 cents a share, from a year earlier when the builder benefited from an initial stock sale of its French unit. The results beat analysts’ expectations by 4 cents. Revenue rose 2.7% to $821.1 million.
* Lennar Corp. said first-quarter profit climbed 131% to $51.3 million, or 75 cents a share, well above the 64 cents analysts expected, as it benefited from the acquisition of rival U.S. Homes Corp. The home builder’s revenue jumped 72% to $1.1 billion.
