FedEx Corp. Updates Third Quarter Earnings Outlook; Strong FedEx Ground Growth, Cost Management Improve Earnings

Business Wire, Feb 11, 2002

Business Editors

MEMPHIS, Tenn.--(BUSINESS WIRE)--Feb. 11, 2002

FedEx Corporation (NYSE:FDX) today announced that earnings for the third quarter ending February 28 are expected to be at the top or slightly in excess of the previously established range of $0.25 to $0.35 per diluted share. The company also reaffirmed its fourth quarter earnings guidance of $0.70 to $0.80 per diluted share.

"Strong revenue and profit growth at FedEx Ground and continued focus on costs at FedEx Express will improve our profitability this quarter," said Alan B. Graf, Jr., executive vice president and chief financial officer. FedEx Ground package volume growth is expected to approach 20% in the third quarter and yield should increase about 5%, which is an improved outlook from two months ago. Shippers are increasingly recognizing the value of the new FedEx portfolio of services, and FedEx Ground is attracting more customers with its reliable and cost-effective package delivery. The company expects additional interest in FedEx Home Delivery from the business-to-consumer market following this month's expansion of the Home Delivery network to cover 90% of the U.S. population.

Package growth at express industry leader FedEx Express continues to be affected by economic weakness, although year-over-year growth comparisons have improved from the second quarter and continue to track the company's December guidance. The additional traffic (primarily Priority Mail) being transported for the U.S. Postal Service under the recently expanded business alliance has helped offset the current softness in the express package business.

With annual revenues of $20 billion, FedEx Corp. is the premier global provider of transportation, e-commerce and supply chain management services. The company offers integrated business solutions through a network of subsidiaries operating independently, including: FedEx Express, the world's largest express transportation company; FedEx Ground, North America's second largest provider of small-package ground delivery service; FedEx Freight, a leading provider of regional less-than-truckload freight services; FedEx Custom Critical, the world's largest provider of expedited time-critical shipments; and FedEx Trade Networks, a provider of customs brokerage, consulting, information technology and trade facilitation solutions.

Certain statements in this press release may be considered forward-looking statements, such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, any impacts on the company's business resulting from the events that occurred on September 11, 2001 and the timing and amount of any money that FedEx is entitled to receive under the Air Transportation Safety and System Stabilization Act, as well as general economic and competitive conditions in the markets we serve, matching capacity to volume levels and other factors which can be found in FedEx Corp.'s and its subsidiaries' press releases and filings with the SEC.