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BUSINESS A25
Thursday 17 March 2016
FedEx rides online shopping to beat Wall Street forecasts
A Federal Express delivery truck driver returns to his truck after delivering a package to a business, nies but not replace them. ed to the pending acquisi-
in Springfield, Ill. FedEx reported financial earnings Wednesday, March 16, 2016. On a conference call with tion of Dutch delivery firm
analysts, FedEx executives TNT Express.
(AP Photo/Seth Perlman) downplayed the threat of Excluding those costs, Fe-
Amazon becoming a deliv- dEx said it would have
DAVID KOENIG more than 6 percent in af- around the country, creat- ery rival. earned $2.51 per share.
AP Business Writer ter-hours trading. ing its own air-freight op- Chairman and CEO Fred Analysts, who usually ex-
DALLAS (AP) — FedEx rode FedEx Corp. has prospered eration where it now uses Smith said FedEx, UPS and clude non-repeating costs
the growth in online shop- from online shopping by carriers like FedEx and UPS. the Postal Service “will re- from their forecasts, had
ping to beat Wall Street delivering packages to Amazon is already building main the primary carriers expected FedEx to earn
expectations for the holi- consumers who increas- a ground network of ware- for e-commerce shipments $2.35 per share, accord-
day season, although profit ingly shop on their comput- houses and delivery trucks. in the U.S. for the foresee- ing to a FactSet survey of
fell 19 percent because of ers or phones rather than in In January, Amazon’s chief able future.” FedEx esti- 24 analysts and $2.33 per
legal bills and acquisition stores. financial officer said the tra- mates that those three de- share by 12 analysts sur-
costs. The company appears ditional carriers can no lon- liver more than 95 percent veyed by Zacks Investment
The package delivery likely to face growing com- ger handle all of the online of online-shopping orders Research.
company said Wednesday petition from one of its re- retailer’s peak-season ship- in the U.S. Revenue rose 8 percent to
that peak-season demand tail customers, however. ping needs. He said that Executive Vice President $12.65 billion, also topping
was better than expected. Amazon.com Inc. recently measures such as putting Mike Glenn added that expectations. The 17 ana-
FedEx raised its profit fore- reached an agreement to Amazon trucks on the road while Amazon’s plans lysts surveyed by FactSet
cast for its current fiscal lease up to 20 Boeing 767 were meant to supplement have “grabbed headlines, had predicted $12.36 bil-
year and its shares jumped aircraft to carry packages the use of delivery compa- the reality is it would be a lion.
daunting task requiring tens Sales in FedEx’s ground busi-
of billions of dollars in capi- ness jumped 30 percent to
tal and years to build” a $4.41 billion, helped by the
network to rival FedEx’s. He growth in online shopping.
added that no single ship- FedEx blamed lower fuel
ping customer accounts surcharges for a 1 percent
for more than 3 percent of revenue decline, to $6.56
FedEx revenue. billion, in its express unit.
For the quarter ended Feb. The Memphis, Tennessee-
29, FedEx earned net in- based company raised its
come of $507 million, or forecast range for earnings
$1.84 per share, down from during the full fiscal year
$628 million, or $2.18 per that ends this spring. It pre-
share, a year earlier. The dicted profit excluding spe-
results were hurt by legal cial items to be between
expenses — mostly on law- $10.70 and $10.90 per
suits by drivers who were share, compared with the
classified as independent prior prediction of $10.40 to
contractors instead of em- $10.90, and analysts’ fore-
ployees — and costs relat- cast of $10.55 per share.
Peabody Energy warns it may file for bankruptcy protection
NEW YORK (AP) — The larg- many utilities have shifted make the payment in 30 Peabody had about 7,600 and Australia. Its U.S. mines
est American coal miner, to using natural gas, which days, it would default and employees at the end of are in Arizona, Colorado, Il-
Peabody Energy, is delay- costs less than coal and it said there’s “substantial last year and has ownership linois, Indiana, New Mexico
ing an interest payment produces less pollution. In doubt” it would be able to stakes in 26 mines in the U.S. and Wyoming.
due this week and warned fact, electricity generation go on. The company made
that it may have to file for from coal fell 13 percent the announcement in a fil-
Chapter 11 bankruptcy last year compared to the ing with the U.S. Securities
protection. previous year, according and Exchange Commis-
Shares of Peabody En- to the U.S. Energy Informa- sion. Peabody said it has
ergy Corp. dropped more tion Administration. U.S. talked with its debt holders
than 47 percent in mid- coal production also fell on ways to improve its fi-
day Wednesday. Its shares to its lowest level in nearly nances, but if that doesn’t
have fallen more than 97 three decades last year, work it may need to file for
percent over the past year. the EIA said. Chapter 11 bankruptcy.
A slowing global economy Within the last year, coal Filing for Chapter 11 bank-
and toughening environ- companies Alpha Natural ruptcy protection allows
mental standards have Resources, Arch Coal and companies to reorganize
slammed the coal indus- Patriot Coal have all filed their debt while they keep
try, which is already beset for bankruptcy protection. theirbusinesses operating.
by bankruptcies, shuttered St. Louis-based Peabody When Arch Coal filed for
mines and layoffs. said Wednesday that it bankruptcy protection in
Peabody makes most of its didn’t pay more than $70 January, for example, it
money by selling its coal to million in interest payments said its mines would remain
utility companies that use it that were due Tuesday. open and its employees
to generate electricity. But If the company doesn’t would not be affected.
