FedEx Sees Earnings Above Wall St. Views

FedEx Corp. expects its second-quarter earnings to beat Wall Street expectations even without government assistance being offered to airlines to offset the Sept. 11 terrorist attacks.

Alan B. Graf Jr., executive vice president and chief financial officer, said Monday that solid growth of FedEx Ground, the company's home-delivery business, contributed to the company's profitability this quarter. 

He also credited the company's broad portfolio of services for helping offset the impact of the terrorist attacks, which hit the company's air cargo Express service the hardest. 

The express delivery company said its earnings are expected to range from 40 cents to 45 cents a share for the quarter ending Nov. 30. 

Analysts surveyed by Thomson Financial/First Call had been forecasting earnings of 35 cents a share. 

The estimated quarterly earnings exclude the company's $101 million share of a $15 billion federal relief package for the airline industry. 

The government assistance, reflected in FedEx operating income for the second quarter, is expected to push earnings to between 61 cents and 66 cents per share. 

Along with the rest of the nation's airlines, FedEx planes were grounded for two days and international deliveries were restricted for over a week after the attacks. 

"We anticipate that Express' U.S. domestic second-quarter average daily package volumes will decline 11 percent year-over-year while FedEx International Priority shipments will decline about 5 percent, both about four percentage points below first quarter growth rates," Graf said. 

He said increased freight revenue and cost management helped offset the air service's impact to earnings. 

The Memphis-based company owns the world's largest cargo airline. Annual revenues are estimated at $20 billion. 

FedEx shares closed up $1.38 at $40.86 in trading Monday on the New York Stock Exchange.