“FedEx Corp. (FDX) plans deeper capacity cuts to Asia after lowering its 2013 earnings forecastamid a widening customer shift to cheaper overseas shipments.
Profit in the fiscal year through May will be $6 to $6.20 a share, down from an earlier forecast of as much as $6.60, the Memphis, Tennessee-based shipping company said in a statement today. Both the projection and fiscal third-quarter profit trailed analysts estimates.
FedEx, an economic bellwether because it moves goods as varied as medical supplies and auto parts, is in the midst of a a $1.7 billion restructuring to compensate for customers moving away from the fastest, most lucrative deliveries. Starting in April, it will decrease capacity to and from Asia and put low- yielding shipments in less expensive networks, Chief Executive Officer Fred Smith said in the statement.
“Our lower-than-expected results for the quarter and reduced full-year earnings outlook were driven by third-quarter international revenues declining approximately $100 million versus our guidance, primarily due to accelerating customers preference for lower-yielding international services,” Chief Financial Officer Alan Graf said in the statement.
Analysts had estimated FedEx, operator of the world’s largest cargo airline, would post full-year profit of $6.35, the average in a Bloomberg survey. FedEx fell 3.3 percent to $103 at 8:07 a.m., before the start of regular trading in New York.
