FedEx quarterly profit up 20.1pc, but 2010 looks less rosy

American air express giant FedEx forecast for fiscal year 2010 has dropped below analyst predictions because of higher maintenance costs and employee compensation despite a robust fourth quarter results ending May 31 of US$9.43 billion in sales, a 20.1 per cent hike profit year on year.

But results still lagged by 85 cents to $1.05 a share, compared to analysts' estimates of $1.02.

The Memphis-based courier company earnings growth was hampered by "significant increases in fixed pension" further stymied by unfreezing pay increases and pension contributions held off during the recession, said chief financial officer Alan Graf in a company statement.

According to analysts' forecasts over the last eight years only one year has seen the company hit forecast and a miss seems likely as "similar risk exists this year given returning expenses to support growth, benefits restoration and pension costs," said Robert W Baird & Co analyst who views the company's shares as "neutral", Bloomberg reported.
(Source:www.schednet.com)