FedEx sees earnings rise but cuts forecast

FedEx Corp.’s earnings rose 4% in its fiscal first quarter, beating Wall Street’s expectations on strong international growth. However, the company lowered its outlook for the full year, blaming economic uncertainty from the downturn in the housing market.

FedEx earned $494 million, or $1.58 a share, compared with $475 million, or $1.53, in the year-earlier quarter. Revenue for the period ended Aug. 31 rose 8% to $9.2 billion.

Analysts had expected profit of $1.54 a share on revenue of $9.07 billion, according to Thomson Financial.

The company’s shares fell $3.06 to $104.45.

In a conference call with analysts, FedEx Chairman and Chief Executive Fred Smith said expansions in Britain and China were helping drive growth.

A new, dedicated route between Manchester, England, and the U.S. will “increase daily capacity on the important UK-to-U.S. route by up to 50%, and it will increase daily capacity from Europe to the U.S. by up to 20%,” he said.

In China, the company has offered domestic next-business-day shipping since May and increased the number of cities and counties where the service is offered to 30 from 19.

FedEx forecast second-quarter earnings of $1.60 to $1.75 a share, below analysts’ average estimate of $1.97, according to Thomson Financial.

For the full year ending in May, FedEx lowered its forecast to $6.70 to $7.10 a share from $7 to $7.40. Analysts predict per-share profit of $7.19.

The company predicted a slow second quarter in part on the acquisition of a freight line that was taking longer than expected to pay off because of the downturn in the housing market, which affects sales of durable goods.