FedEx spending on distribution hubs weighs on its 2Q profit

Save Story
Leer en español

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 Information in the story may be outdated or superseded by additional information.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 This material may not be published, broadcast, rewritten or redistributed.

Most recent Business stories

Related topics

The Associated Press


    Get informative articles and interesting stories delivered to your inbox weekly. Subscribe to the Trending 5.
    By subscribing, you acknowledge and agree to's Terms of Use and Privacy Policy.

    KSL Weather Forecast