FedEx says Hurricane Sandy toppled Q2 profit
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FedEx shareholders could have made an additional 11 cents per share in earnings if Hurricane Sandy had not struck the East Coast, according to the company's Chief Financial Officer Alan B. Graf Jr.. That translates into a cost of $34.6 million.
The Memphis, Tenn., company on Wednesday reported second quarter earnings of $1.39 per diluted share, down from last year's $1.57, an 11 percent decline.
Overall profit of $438 million was down from $497 million in the same quarter last year.
Mr. Graf told analysts on a conference call Wednesday the storm wiped out some earnings that would have been realized from cost-saving measures, including the elimination of the equivalent of 1,736 full-time jobs at the global shipper.
FedEx has offered buyouts to thousands of employees, mostly in the Express segment, as part of its plan to cut costs. When asked by analysts for more specific numbers, Mr. Graf would only say the initial cost of the buyout packages will run between $550 million and $650 million. More specific numbers will be available after the company sees how many employees take the buyout.
The FedEx Ground unit, which is based in Moon, showed strong revenue growth, which Mr. Graf credited both to capturing more market share and to expanded Internet commerce. On an average day during the quarter ended Nov. 30, FedEx Ground delivered 4 million packages a day while the SmartPost unit, which works with the U.S. Postal Service, moved 2 million packages a day.
On Cyber Monday, the Monday after Thanksgiving, Mr. Graf said FedEx Ground moved 8.7 million packages while SmartPost moved 6.1 million packages.
FedEx Ground experienced a 4 percent growth in revenues with $1.38 billion in revenues for the quarter, up over last year's $1.33 billion.
First Published December 20, 2012 12:29 am