FedEx Cuts Outlook After TNT Buy
September 20 2016 - 5:30PM
Dow Jones News
FedEx Corp. lowered its yearly guidance to include its
acquisition of TNT Express NV as the package-delivery giant works
to integrate the Dutch parcel firm amid a tepid economic
outlook.
Still, adjusted earnings and revenue topped expectations, and
shares in the company added 1.2% to $164.58 in after-hours
trading.
FedEx bought TNT in May for nearly $5 billion. For the fiscal
year ending in May 2017, the Memphis, Tenn., company now expects
adjusted earnings of $10.85 to $11.35 a share, including TNT
results and assuming "moderate economic growth." It had previously
forecast adjusted per-share earnings of $11.75 to $12.25.
Chief Executive Frederick Smith said the integration of TNT
Express is "proceeding smoothly." He said results were strong,
"especially given the global economy's continued low growth."
For the August quarter, FedEx reported a profit of $715 million,
or $2.65 a share, up from $692 million, or $2.42 a share, a year
ago. FedEx said costs from TNT's integration and restructuring
program dented earnings by 17 cents a share, while an intangible
asset amortization expense for TNT shaved another 8 cents off
per-share profit.
Excluding those items, adjusted per-share earnings rose to $2.90
a share. Revenue shot up 20% to $14.7 billion. Analysts polled by
Thomson Reuters had projected adjusted per-share profit of $2.81 on
$14.61 billion in revenue.
Chief Financial Officer Alan Graf said that as FedEx continues
to integrate TNT, there will be opportunities to improve
earnings.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
September 20, 2016 17:15 ET (21:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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