FedEx lowers 2013 profit view, plans air cost cuts

MEMPHIS, Tenn., Tue Sep 18, 2012 – FedEx Corp. lowered its fiscal 2013 profit target on Tuesday, saying earnings could slide as much as 6 percent for the year, as a weakening world economy prompts customers to shift toward lower-priced and slower shipping options.

The world’s second-largest package delivery company said makers of electronics and mobile phones had begun to move more of their cargo on ships as pressure on their selling prices makes the cost of air freight harder to bear.

“A lot of traffic is moving onto the water because moving goods by air is very energy-intensive,” Chief Executive Officer Fred Smith told investors on a conference call. “You can’t have jet fuel going up to close to $4 a gallon on occasion without it having a big effect on the choices people make.”

The Memphis, Tennessee-based company plans to take a “significant amount of cost” out of its express air freight operation, Smith said. It will provide details at an October investor meeting, but does not plan layoffs or “draconian steps,” he added.

Smith founded the company in 1971 as an air shipper, but today it moves a large amount of goods by truck.

FedEx said it expected a profit of $6.20 to $6.60 per share for its fiscal year, which ends in May. That is below both its prior forecast of $6.90 to $7.40 and Wall Street’s estimate of $7.03.

FedEx’s larger rival, United Parcel Service Inc., had cut its 2012 profit forecast in July, but the midpoint of the revised range would still represent roughly 9 percent growth.

FedEx’s shares fell 1.7 percent to $87.78 on the New York Stock Exchange.

Procter & Gamble cuts outlook for year; restructuring under way

CINCINNATI, Fri Apr 27, 2012 – Procter & Gamble Co. lowered its profit expectations for the year on Friday as it works on its new restructuring plan and continues to feel some pressure from higher commodity costs.

Shares of P&G fell 2 percent to $65.55 in premarket trading.

The world’s largest household products maker posted a lower quarterly profit, weighed down by charges for its restructuring, which calls for eliminating 5,700 nonmanufacturing jobs and cutting $10 billion in costs by the end of fiscal 2016.

The maker of Pampers diapers and Gillette razors earned $2.41 billion, or 82 cents per share, in the third quarter ended in March, compared with $2.87 billion, or 96 cents per share, a year earlier.

Core earnings per share, which exclude items such as restructuring charges, were flat at 94 cents. The results topped analysts’ expectations of 93 cents, according to Thomson Reuters I/B/E/S.

Sales rose 2 percent to $20.19 billion.

P&G said it now expected to post core earnings per share of $3.82 to $3.88 this year. Back in February, it had forecast $3.93 to $4.03 for the year ending in June.

P&G outlined its restructuring plan in February.