FedEx Corp. said earnings for the third quarter of its fiscal year took a severe beating due largely to severe winter weather In the U.S. and Europe that significantly disrupted its global shipping operations.
“We experienced significant network disruptions in the U.S. and Europe and unusually high costs from severe winter storms,” said Alan Graf, Jr., FedEx executive vp & CFO, in an earnings guidance update. “In addition, fuel prices continued to escalate since we provided our earnings outlook in December,” he added. “However, we continue to see strength in our base business across all transportation segments and geographies.”
FedEx estimated it will suffer a 25-cent per diluted share loss of revenue and increased expenses resulting from severe winter storms and higher-than-expected fuel prices. Therefore, it now expects earnings to range from 70 to 90 cents per diluted share for its third fiscal quarter – excluding combination costs within its FedEx Freight LTL subsidiary – as opposed to the 95 cents to $1.15 in earnings per share it previously forecast.
The company stressed this guidance assumes no further weather impact and stable fuel prices for the remainder of the quarter -- but noted these costs will also impact earnings guidance for its full fiscal year.