CHICAGO – Package delivery company FedEx Corp. (FDX) on Wednesday reported a dip in profit, citing a slower economic environment, lower fuel surcharges and severe winter storms, but came in above market expectations.
FedEx shares slid more than 2 percent after the announcement.
FedEx reported net income for its fiscal third quarter, ended Feb. 28, of $420 million, or $1.35 a share, compared with $428 million, or $1.38 a share, a year earlier.
Wall Street analysts had on average expected earnings of $1.33 per share.
"The U.S. economy grew at a lower rate than we expected in the third quarter, and we saw continued adjustments in the automotive and housing markets," FedEx Chief Executive Frederick Smith said in a statement.
"I believe, however, this represents a healthy transition for the economy as it phases into a more sustainable growth rate," he added.
Like its main rival United Parcel Service Inc. (UPS.N), FedEx is seen as a bellwether of U.S. economic activity.
FedEx said that for its fiscal fourth-quarter its expects earnings per share in a range of $1.93 to $2.08. Analysts have forecast earnings for the quarter of $2.03.
The company also said it expected 2007 fiscal full-year earnings per share in a range of $6.45 to $6.60 a share, compared with analyst forecasts of $6.77 per share.
In the fiscal third quarter FedEx said winter storms had reduced earnings by an estimated 6 cents a share. The company also said earnings for the quarter were boosted by a reduction in taxes of 8 cents a share.
In pre-market trading, FedEx shares were down 2.5 percent at $109.50 from Tuesday's close of $112.29.