FedEx Cor­po­ra­tion, op­er­a­tor of the world's largest car­go air­line, cut its an­nu­al prof­it out­look as a weak­en­ing econ­o­my spurs ship­pers in the US and over­seas to switch to cheap­er de­liv­ery op­tions. Earn­ings for the year end­ing in May will be US$6.20 to US$6.60 a share com­pared with a pre­vi­ous fore­cast of US$6.90 to US$7.40, the Mem­phis, Ten­nessee-based com­pa­ny said yes­ter­day. That ex­cludes po­ten­tial ben­e­fits from cost cuts cur­rent­ly un­der re­view.

FedEx, an eco­nom­ic bell­wether be­cause it ships goods from fi­nan­cial doc­u­ments to elec­tron­ics, pared its fore­cast for US ex­pan­sion next year to 1.9 per cent from a June pre­dic­tion of 2.4 per cent. It trimmed its fore­cast for glob­al growth this year and next to 2.3 per cent and 2.7 per cent, down from 2.4 per cent and three per cent, re­spec­tive­ly.

In the Ex­press seg­ment, FedEx's largest by sales, op­er­at­ing mar­gin slipped to 3.1 per cent in the three months through Au­gust from 4.4 per cent a year ear­li­er. Rev­enue from do­mes­tic ship­ments in the US grew two per cent per pack­age as high­er rates eased the ef­fects of a five per cent drop in av­er­age dai­ly vol­ume.

Glob­al growth

Un­favourable cur­ren­cy ex­change rates and low­er fu­el sur­charges pulled rev­enue per pack­age down four per cent in in­ter­na­tion­al ex­ports, erod­ing a one per cent in­crease in av­er­age dai­ly vol­ume. Ex­press prof­it dropped 28 per cent to US$207 mil­lion, the com­pa­ny said.

Bloomberg