Revenue at the second-largest U.S. package-shipping company slid 20 percent to $8.01 billion, trailing the $8.23 billion average estimate of 9 analyst projections compiled by Bloomberg. Net income for the three months ended Aug. 31 was $181 million, or 58 cents a share, the Memphis-based company said.
The 4 percent decline in overseas priority deliveries, the smallest slide in four quarters, reflects returning global demand. FedEx has cut jobs and suspended matching contributions to employees' 401(k) retirement accounts in the recession to lower costs by $3 billion, half of which will be permanent.
"They were a little light on revenue, but it also highlights how effective their cost controls have been," said Don Broughton, an analyst at Avondale Partners in Nashville, who has a "market outperform" rating on the shares.
"International priority has sequentially picked up, and that shows the world economy is starting to recover."
FedEx fell $1.74, or 2.2 percent, to $76.46 at 4 p.m. in New York Stock Exchange composite trading as U.S. stocks declined.
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