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FedEx Down Fractionally After Announcing Earnings

Shares of FedEx were down about 0.5 percent in pre-market trading on Wednesday. The company announced fiscal fourth quarter 2014 earnings that came in mixed.

FedEx (NYSE: FDX) reported EPS of $2.13 excluding one time charges versus analyst estimates of $1.97 and revenue of $11.40 billion versus consensus of $11.44 billion.

The company’s fourth-quarter profits fell 45 percent to $303 million equating to 95 cents per share as international customers opted for less-expensive delivery options. That’s a year over year decrease from $550 million or $1.73 per share.

The company is in the midst of a cost-cutting strategy with the goal of cutting annual spending by $1.7 billion by 2016. Among the steps taken, the company offered buyouts to 10 percent of its workforce. 3,600 employees accepted the buyouts and 40 percent of those left the company on May 31.

Guidance is weak. For the fiscal year beginning June 1, the company expects growth of between 7 and 13 percent suggesting a range of $6.67 to $7.04 per share. Analysts were expecting $7.28 per share.

Chairman and CEO Fred Smith said that its ground-services business remained strong with improving margins in the freight business during the fourth quarter.

Disclosure: At the time of this writing, the author had no position in any of the companies mentioned.

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