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FedEx to Cut Expenses With Early Retirement Program

June 03, 2003|From Bloomberg News

FedEx Corp. said Monday that it would spend as much as $290 million this fiscal year to offer 14,000 employees early retirement and contain rising pension and health-care costs that are hurting profit.

Earnings in its fiscal first quarter ending Aug. 31 will be 52 cents to 60 cents a share, the company said, below the 61-cent average in a Thomson First Call survey of analysts. Fiscal 2004 profit will be $3 to $3.15 a share, excluding the retirement program's cost of 25 cents to 30 cents a share.

The retirements may trim 12% of the 116,000 U.S. employees at the FedEx Express unit, which transports packages by airplane for overnight delivery. Growth at the unit, the company's biggest, has declined in the U.S. as companies shipped fewer goods or opted for less-expensive deliveries by truck.

FedEx shares rose 63 cents to $64.61 on the New York Stock Exchange before the retirement program was announced.

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