FedEx offers glum outlook on economic growth

FedEx might offer the clearest look at the disconnect between the soaring stock market and the listless global economy. The world's largest freight carrier posted a 45% drop in its fourth quarter profits and offered its investors a cautious outlook for 2014, noting that customers are looking for lower-cost carriers internationally. FedEx said its outlook was based on expectations of just 2.3% GDP growth for the United States. Read more >>

FedEx Sounds Message: Weak Economy, Except On The Web

FedEx‘s performance is hurting, the result of cost-conscious customers looking for cheaper shipping methods. The world’s second-largest package-delivery company sees “persistent weakness” in the global economy, CEO Fred Smith says, though a few rays of light shine through the gloom that Smith detailed today in the company’s quarterly report.

Profit at FedEx fell 11.9% from a year ago to $438 million, $1.39 a share. Excluding one-time items, FedEx made $445.5 million, $1.50 a share. Analysts had expected it to earn $445.5 million, $1.41 a share. Some of the weakness comes from Hurricane Sandy, Smith says, which disrupted transportation routes on the East Coast for weeks. Stifel Nicolaus estimates that Sandy dented earnings by 11 cents a share.

ncome picked up at two of FedEx’s businesses—by 4% in Ground (to $412 million) and 90% in Freight (to $76 million). But at the company’s largest unit, Express—also the most closely watched part of the shipper’s business—operating income fell by a third to $230 million. The decline came mostly from lower daily volume in the U.S. Abroad, volume actually increased, though demand lessened for the higher-margin services. Efforts to modernize its fleet continued: FedEx ordered four more 767 freighters. Read more >>

Fedex to cut thousands from workforce

Fedex, the global delivery company, said Wednesday it was planning to cut "several thousand" people from its workforce via a voluntary departure program beginning early next year. Company chairman Fred Smith said at an investment conference in Memphis, Tennessee, that the cuts would come in the company's Fedex Express global express delivery service, and in the US unit, Fedex Services.

The cuts are part of a plan to boost profits by $1.7 billion by 2016, mainly through intensified cost reductions. They also come in the wake of the company's warnings that its business is being hit by the global economic slowdown. The company gave no specific number on the staff reductions, but emphasized they would be voluntary. Read more >>

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