FedEx posts net loss tied to one-time costs
FedEx (FDX) swung to a net loss of $895 million with revenue of $12.1 billion in the fiscal fourth quarter ended May 31, the company announced Wednesday morning.
For the full fiscal year, the shipping giant posted net income of $1.05 billion, down 55% from the same period a year earlier.
The company's performance took a hit in part because of one-time changes to the way it handles pension accounting and because of aircraft impairment charges.
But executives said they're confident FedEx will continue to improve its profit margins and revenue.
"We are really well positioned for long-term growth," FedEx CEO Fred Smith said in a conference call.
The company also announced today that it had raised the mandatory retirement age for board directors from 72 to 75.
Investors found the earnings report discouraging. The company had reported $780 million in net income in the fourth quarter of the 2014 fiscal year.
Shares fell nearly 3% in early trading.
FedEx recorded a $2.2 billion charge connected to its decision to stop the actuarial process of "smoothing," in which accountants spread out the effect of pension gains and losses over time. Instead, the company is now calculating the value of its pension assets based on current market conditions.
Revenue in the company's largest segment, the FedEx Express business, fell 4% to $6.7 billion for the fiscal year. But adjusted operating profit margin rose from 7.6% a year ago to $8.9%. The company slashed costs to make up for reduced fuel surcharges and the impact of the strong U.S. dollar.
FedEx projected U.S. gross domestic product of 2.3% for 2015 and 2.9% for 2016.
Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.