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FedEx Profit Jumps 40%

September 22, 2006|From the Associated Press

FedEx Corp. said Thursday that its fiscal first-quarter profit rose 40%, driven by strong demand for ground and international express shipments.

Memphis, Tenn.-based FedEx also said a new contract it had tentatively struck with its pilots union would reduce full-year profit by 20 cents a share. Excluding that cost, FedEx raised its outlook for fiscal 2007.

For the quarter ended Aug. 31, the company reported net income of $475 million, or $1.53 a share, compared with a profit of $339 million, or $1.10, a year earlier. Revenue rose 11% to $8.54 billion.

Wall Street had forecast a profit of $1.52 a share, the average estimate of analysts surveyed by Thomson Financial, on projected sales of $8.39 billion.

Excluding charges for the labor contract, the company sees second-quarter profit of $1.65 to $1.80 a share, and full-year earnings of $6.50 to $6.85 a share -- above previous guidance of $6.45 to $6.80 a share issued in June.

Wall Street is expecting quarterly profit of $1.75 a share and full-year earnings of $6.80, on average.

FedEx shares fell $1.53, or 1.4%, to $106.

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