FedEx Corp., the largest air-cargo carrier, said Wednesday that its fiscal second-quarter profit rose 8.5% on global demand but issued an earnings forecast that trailed analysts' estimates, sending shares to their biggest drop in nine weeks.
Net income increased to $511 million, or $1.64 a share, in the three months that ended Nov. 30, from $471 million, or $1.53, a year earlier. Sales climbed 10% to $8.9 billion.
The Memphis, Tenn.-based shipper said third-quarter profit would be damped by an increase in fuel prices.
FedEx's second-quarter results provided the 12th consecutive quarterly profit increase for the company, which hasn't reported a loss since 1997.
"They had strong growth in the second quarter," said Jim Corridore, a New York-based Standard & Poor's analyst who rates FedEx a strong buy. "Obviously, they can't control fuel prices. Their core business is just fine."
FedEx said third-quarter earnings would be $1.20 to $1.35 a share and fourth-quarter profit would be $1.98 to $2.13. Analysts polled by Bloomberg News expect the company to earn $1.55 and $2 in those periods.
