NEW YORK - FedEx Corp.'s (FDX) third-quarter profit jumped more than 50 percent and beat Wall Street expectations on a mix of volume growth and lower fuel costs.
The Memphis, Tennessee-based package delivery company's revenue edged up but missed expectations as lower fuel surcharges and unfavorable currency exchange rates tempered the benefits of volume growth. Its forecast for the full year also was below expectations.
Its shares fell more than 4 percent in morning trading.
The company earned $580 million, or $2.01 per share, for the three months ended Feb. 28. That was up from $378 million, or $1.23 per share, a year ago. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $1.88 per share.
Revenue rose slightly to $11.72 billion, missing Street forecasts, with eight analysts surveyed by Zacks expecting $11.85 billion.
"We had a very successful peak season as volumes grew across all transportation segments, and our profit improvement programs are moving ahead as scheduled," CEO Frederick W. Smith said in a statement.
The company has been restructuring its largest unit, Air Express, in part by modernizing its fleet. Revenue in that unit was essentially flat because of lower fuel surcharges and currency rates, though operating results improved because of fuel costs and weather.
Revenue in the company's ground business rose 7 percent because of growth both business to business and home delivery services. Freight segment revenue rose 6 percent.
Looking ahead, the company narrowed its full-year outlook to between $8.80 and $8.95 per share, down from prior guidance of $8.50 to $9 per share. Analysts surveyed by FactSet expected $8.97 per share.
Shares of FedEx dropped $4.54, or 2.6 percent, to $171.17 in morning trading Wednesday. Its shares are up about 23 percent so far this year.