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FedEx Cuts Full

Bloomberg News



, operator of the world's largest cargo airline, cut its full-year profit forecast after winter storms caused fiscal third-quarter results to fall below analysts' estimates.


Earnings per share of $1.23, excluding some items, trailed the $1.46 average of , according to data compiled by Bloomberg. Storms that hit the U.S. Midwest and East Coast in the quarter ended Feb. 28 reduced operating income by an estimated $125 million, the Memphis, Tennessee-based company said in a statement.


FedEx projects earnings for the full year of $6.55 to $6.80 a share, down from a previous forecast last quarter of $6.73 to $7.10 a share. The outlook does not include benefits from the company's full share repurchase plan.


'While severe winter weather often affects our third-quarter results, the impact from multiple severe storms and frigid temperatures was significantly more pronounced this year and we are reducing our full-year earnings per share guidance as a result of the weather impact,' said chief financial officer Alan B. Graf, in the statement.


FedEx was forced to suspend its money-back delivery guarantee 11 times because of the storms, compared with a historical average for the quarter of two, according to Donald Broughton, an Avondale Partners LLC analyst.


Still, FedEx sidestepped some of the problems experienced at rival United Parcel Service Inc., which saw fourth-quarter costs rise by $150 million as a late surge in online Christmas shopping caused missed deliveries. Refunds reduced quarterly revenue by $50 million.


To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net


To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Molly Schuetz, James Callan


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