FedEx Corp. posted an unadjusted loss for its fiscal fourth quarter and lowered its guidance for the coming year as it continues to beef up its ground operations to keep up with the growth in online shopping.
The company said Tuesday that it lost 26 cents per share for the quarter ended May 31, compared to a loss of $3.16 a year ago. But excluding pension-accounting adjustments, expenses related to its acquisition of Dutch parcel firm TNT Express NV and other items, FedEx earned $3.30 per share compared to adjusted earnings of $2.66 a year ago.
Revenue increased 7.4% to $13 billion. Analysts had forecast adjusted earnings of $3.28 a share on revenue of about $12.8 billion.
“Our May 25 acquisition of TNT Express capped a historic year of significant accomplishments that benefited shareowners, team members and customers, and strongly positions FedEx for long-term profitable growth,” FedEx’s CEO Fred Smith said in a news release.
Operating results benefited from improved yield management, the continued positive impacts from profit improvement program initiatives at FedEx Express and strong volume growth at FedEx Ground, the company said.
“We were especially pleased with FedEx Express’s continued improvement in operating margin, which was 11.3% in the fourth quarter,” FedEx’s CFO Alan Graf.
The company lowered its fiscal 2017 guidance due in part to continued expenses of integrating TNT Express and an expected increase in capital expenditures to about $5.1 billion. Adjusted earnings are projected to be $11.75 to $12.25 per share excluding the TNT Express results.
“FedEx’s main task in fiscal 2017 will be to get the TNT Express integration process on a firm footing, so 2017 promises to be a year of heavy investment,” The Motley Fool said. Its capital spending was $4.8 billion in fiscal 2016 and $3.5 billion just two years before that.
The Associated Press said the boom in e-commerce has strained the networks of FedEx and United Parcel Service and FedEx will use its capital to expand its ground network and buy more aircraft.
In trading Wednesday, FedEx’s shares were down 4% at $157.34.