FedEx profit declines 22%

FedEx Corp. said its fiscal first-quarter earnings fell 22% but still met Wall Street’s expectations, as cost cuts partially offset the effect of slowing global growth.

The package delivery company also predicted that it would beat analysts’ expectations for its fiscal second quarter and said it would raise shipping rates at its Express unit early next year.

Memphis, Tenn.-based FedEx earned $384 million, or $1.23 a share, in the three months that ended Aug. 31, compared with $494 million, or $1.58, a year earlier. Revenue rose 8% to $9.97 billion.

A Thomson Reuters poll showed analysts on average had expected profit of $1.23 a share on revenue of $9.92 billion.

For the second quarter, FedEx expects to earn $1.40 to $1.60 a share, well above Wall Street’s average forecast of $1.35. The company earned $1.54 in the year-earlier quarter.

For the full year, the company maintained its profit forecast of $4.75 to $5.25 a share, citing slowing global growth. Analysts expect $5.18. FedEx said its predictions incorporated current fuel prices.

FedEx’s Express unit will raise rates by an average of 6.9% for U.S. and U.S. export services beginning Jan. 5. The company said the rate hike would be partially offset by a 2% reduction in its fuel surcharge.

FedEx shares rose $3.06, or 3%, to $91.13.