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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: The IB Dude who wrote (39503)	5/7/2001 2:31:54 PM
From: Stoctrash	Read Replies (1) \| Respond to of 50167

Study hard Zain, Economics lesson in the works me thinks. FED pulling all stops and history has shown they usually win the bear battle. Should make for an interesting summer no doubt. ============= Monday May 7, 1:01 pm Eastern Time FedEx Blames Economy for Profit Warning MEMPHIS, Tenn. (Reuters) - Express package shipping giant FedEx Corp (NYSE:FDX - news), battered by a slowdown in the U.S. economy, on Monday issued another profit warning for its fiscal fourth quarter and said fiscal first-quarter earnings would likely fall ``significantly'' below the previous year's results. Memphis-based FedEx, the world's No. 1 express package shipper, said it expected to earn 50 cents to 60 cents a share in the three months ending May 31, 2001, well below the 85 cents it earned in the same period last year. Analysts on average had been expecting the company to earn 69 cents a share in the fourth quarter and 57 cents a share in the first quarter, according to research firm Thomson Financial/First Call. In early April, FedEx, the parent company of Federal Express, said it would not earn the 85 cents to 90 cents a share expected by analysts for the fourth quarter. The company earned 58 cents in its fiscal first quarter in 2000. ``I'm not surprised by the warning itself, but I am by the magnitude of it,'' said BB&T Capital Markets analyst Thom Albrecht, who noted that FedEx's average domestic daily shipping volumes had slipped 9 percent in April from the year-earlier period. Average daily shipping volumes are a key measure of financial health in the package delivery business. The profit warning, the second time in five weeks that FedEx had lowered its fourth-quarter profit outlook, added to the dark clouds hanging over package delivery and transportation companies. Last month, FedEx rival United Parcel Service Inc. (NYSE:UPS - news) reported a 14 percent drop in first-quarter operating earnings and warned that second-quarter profits would fall at the low end of estimates due to a weaker U.S. economy. Analysts expect UPS, the world's No. 1 package delivery company, to earn between 53 cents and 57 cents a share in the second quarter, according to First Call. ``When I look at both of these companies from a volume and earnings perspective, I'm just not sure where bottom is,'' said Albrecht, who maintains hold ratings on both FedEx and UPS. Shares of FedEx, which have traded flat in the past year, dropped 83 cents to $40.45 in midday trading on Monday on the New York Stock Exchange. UPS, off about 6 percent from a year ago, lost 63 cents to $57.45 on the NYSE. The Standard & Poor's 500 Index (.SPX) has fallen about 10 percent in the past year. FedEx and UPS, which benefited handsomely for much of last year as the U.S. economy galloped at a fast clip, have in recent months seen their shipping volumes squeezed. In late March, FedEx reported flat volume growth for its fiscal third quarter ended Feb. 28, 2001. Last month, UPS reported its volumes grew 2 percent in the first quarter of 2001, the Atlanta-based company's most recent reporting period. ``Deteriorating economic conditions and the rapid decline in the high-tech and other durable goods industries have increasingly affected FedEx Express volumes,'' FedEx Chief Financial Officer Alan Graf said in a statement accompanying the company's fourth-quarter profit warning on Monday. Analysts said that both FedEx and UPS needed to trim costs and keep capital spending in line in the remainder of 2001, though they said that cost cutting alone only partially offset the impact of a prolonged economic slowdown.