Dire Straits for FedEx
June 17, 2009 by Mark Ellis
Filed under Business
Add FedEx’s name to the growing list of companies struggling under the burden of the economic recession: the second largest package shipping company in the country has reported a steep loss of money. FedEx blames this on a general downsizing in shipments for consumers and businesses and does not expect things to get better any time soon.
In the quarter that ended in May, FedEx lost $876 million, or $2.82 a share, compared to a loss of $241 million a year ago, or $0.78 a share. The company has also taken charges worth about $1 billion for situations related to its acquisition of Kinko’s and a trucking company, as well as for cutbacks and employee severance related fees.
Right now, FedEx predicts that this quarter will not be much better, anticipating a relatively meager profit when compared to business a year ago. The shipping company has also blamed an increase in fuel prices and a drop in industrial productivity for potentially holding back its earnings in the coming quarter.
Image: Flickr
