MEMPHIS, Tenn. — FedEx’s second-quarter earnings jumped 23 percent, but the package delivery company missed Wall Street forecasts and left its expectation for the full fiscal year unchanged.
FedEx said a jump in plane maintenance costs blunted gains the company reaped from managing costs, lowering its pension expense and growing its export package revenue. The company expects the increase in aircraft maintenance costs to subside starting in the fourth fiscal quarter.
Shares of the Memphis, Tennessee, company fell more than 4 percent in premarket trading about 90 minutes ahead of the market opening.
Overall, FedEx Corp. earned $616 million, or $2.14 per share, in its fiscal second quarter. That is up from $500 million, or $1.57, in last year’s quarter, when FedEx also missed analyst expectations as customers continued to shift toward cheaper ground-shipping options and away from overnight air.
Total revenue climbed 5 percent to $11.94 billion in this year’s quarter.
But analysts expected FedEx to earn $2.22 per share on revenue of $11.97 billion, according to Zacks Investment Research.
FedEx said it still expects full-year earnings of between $8.50 and $9 per share. Analysts surveyed by FactSet forecast earnings of $9.11 per share for the year.
FedEx and rival UPS are heading into their busiest period of the year and hoping to avoid a repeat of last December, when an ice storm and a surge in last-minute online shopping caught them off-guard. About 2 million packages promised for delivery by Christmas Eve didn’t make it. This time, FedEx planned to hire 50,000 seasonal workers and invest in its ground-shipping network to make deliveries on time.
But there is always the risk of surprises, like the accident Monday on a New Jersey highway. On what FedEx expected to be the busiest delivery day of the year, one of its trucks overturned, sending a mountain of packages spilling across a grassy median.
Another truck hauling two trailers crashed Tuesday in Georgia, also sending packages spilling all over the highway.
Shares of FedEx fell 4.4 percent, or $7.66, to $166.60 in premarket trading Wednesday. The stock had climbed 21 percent since the beginning of the year through Tuesday’s close, more than tripling the gain of the Standard & Poor’s 500 index.