Estimated read time: 1-2 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
NEW YORK (AP) — FedEx is spending heavily on distribution hubs and hiring more employees to meet heaving demand for its shipping services, expenses that weighed on its second-quarter profit.
The Memphis, Tennessee-based company on Tuesday reported adjusted earnings that missed Wall Street expectations. Its shares fell 3 percent in after-hours trading.
FedEx is in the midst of what it expects to be another record-breaking holiday shipping season. It said demand is higher than usual this year since Christmas Day falls on a Sunday. Last month, FedEx said it expects volume to be up 10 percent from last year but didn't provide specific numbers.
Overall, FedEx reported net income of $700 million, or $2.59 per share, in the three months ending Nov. 30. That's up from $691 million, or $2.44 per share, in the same quarter a year ago.
Earnings, adjusted to remove the costs related to its recent acquisition of TNT Express, were $2.80 per share. That's well below the $2.91 per share that analysts expected, according to FactSet.
Revenue rose 20 percent to $14.93 billion, beating the $14.91 billion that analysts expected.
But its operating expenses rose 22 percent to $13.8 billion.
Shares of FedEx Corp. fell $5.99 to $192.75 in after-market trading following the releases of the earnings report.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
