News
- FedEx income drops 91 percent
- 6/18/2009
Company chief "optimistic" worst of recession is over
FedEx Corp is blaming the global recession for a massive income decline.
The company’s fiscal year wrapped up May 31. It reported a net income of US$98 million, down 91 percent from last year’s US$1.13 billion.
Revenue was down six percent to US$35.5 billion, and operating income was US$747 million, a 64 percent drop from the previous year.
According to FedEx, the economic downturn has meant lower shipment volumes for both its Express and Freight business segments. Reduced fuel surcharges and lower shipment weights further chipped at revenue.
The company does not expect this bleak situation to improve overnight.
“The operating environment for our first two quarters in fiscal 2010 is expected to be extremely difficult,” said Alan Graf Jr, the company’s executive vice-president and chief financial officer, adding that manufacturing activity is expected to remain weak for some time. He also said that volatile fuel prices will make it tough to predict the company’s performance over the coming year.
Despite this, Fred Smith, the company’s president, chairman and CEO, feels that things are looking up.
“There are signs that the worst of the recession is behind us,” he said. “We remain optimistic that we will see quarter-over-quarter economic improvement later this calendar year.”From MM&D magazine