FedEx shares fall as company’s Q2 profits lower than expected

International logistics company FedEx saw its shares fall by 2.6% on Thursday as it reported Q2 operating margins increase by 6.7% to USD $2.42 per share, but still below expectations by Wall Street, that predicted returns of $2.67 a share.

Operating revenues were still solid at $692 million – a year on year increase of 5.6%. Where its parcel delivery business saw strong growth, there was some stagnation in the company’s freight business. FedEx Ground for example, saw revenues increase by 29% with operating margins of 14%. However, FedEx Freight, its LTL business, saw revenues fall by 21%. FedEx Express meanwhile saw revenues fall 4% to $6.59 billion.

FedEx is seen as a bellwether of the US economy, which has not seen strong growth in the last 12 months. This seriously impacted FedEx Freight’s business in the last quarter. The company however expects record business for this year’s peak season, and has hired 50,000 temporary employees to meet demand.

However, the company’s forecast for the financial year seems to be on course to achieve revenues of $12.7 billion for the full financial year, up from $11.7 billion in 2014, which is in line with analysts’ estimates.


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