FedEx profit up 20pc to US$935 million on pre-Christmas trade
FEDEX second quarter net profit surged by 20
FEDEX second quarter net profit surged by 20.6 per cent year on year to US$935 million on revenue growth of 9.2 per cent over the 12-month period ended November to $17.8 billion, fuelled by 'another record setting holiday season' that offset weakening market conditions in Europe and China, although the US recorded strong growth.
The company has consequently lowered its fiscal 2019 earnings guidance and is hastening efforts to cut costs, including a voluntary redundancy programme for eligible employees, international network capacity reductions at FedEx Express, limited hiring in staff functions and reductions in discretionary spending.
The buyout programme is expected to cost $450 million to $575 million but save the company $225 million to $275 million in fiscal year 2020, reported London's Air Cargo News.
'The Eurozone's growth has slowed from 2.5 per cent last year to under two per cent in the second half of 2018, and economic growth in the UK has slowed sharply since July,' said vice president Raj Subramaniam.
'The secular slowdown in Chinese economy has been exacerbated by trade tensions. Spill over effects from these tensions and the fading tech cycle have negatively impacted growth throughout Asia,' he said.
'Emerging Asia growth slowed from six per cent in 2017 to 5.6 per cent in the third quarter and world trade slowed to just 3.5 per cent compared to 5.3 per cent in the third quarter of 2017. Leading indicators point to positive but even slower trade growth near term,' Mr Subramaniam said.