"Over the last couple of years customers have opted to trade a bit of speed for a lower price," Chief Executive Fred Smith told investors on Wednesday. "We're moving it on the ground more as opposed to flying it as much." As part of a restructuring plan announced in October, the company plans to shed some staff; it has extended a buyout offer that it expects thousands of US workers to accept as it bids to trim costs at the air express unit, where profit slumped about 33 percent.
FedEx reported fiscal second-quarter earnings of $438 million, or $1.39 per share, on Wednesday, compared with $497 million, or $1.57 per share, a year earlier. Disruptions relating to Superstorm Sandy - which walloped the East Coast late in October and killed more than 130 people - pulled earnings down by about 11 cents per share. Factoring out those charges, profit was $1.50 per share, more than the $1.41 analysts had forecast, according to Thomson Reuters I/B/E/S.
FedEx shares rose 3 percent to $95.24, their highest since March, in morning trading on the New York Stock Exchange. The company's ground business, meanwhile, is taking market share from larger rival, United Parcel Service Inc, a FedEx executive said. Revenue grew 4.7 percent to $11.1 billion from $10.6 billion a year earlier. The company held steady its profit forecast for 2013 - it expects to earn $6.20 per share to $6.60 per share for the fiscal year through May. In September, FedEx had cut that forecast by about 10 percent.