FedEx raises 4Q earnings estimate

The package shipping giant predicted fourth quarter earnings of $1.20 to $1.30 a share, excluding the costs of an early retirement and severance program at FedEx Express, the company's cargo airline. That was an increase of 5 cents a share in both the high and low end over the previous forecast. Its fourth quarter ends in May.

FedEx, which also owns trucking lines and recently purchased the copy chain Kinko's, estimated fiscal 2004 earnings of $3.40 to $3.50, excluding a one-time tax benefit in the first quarter and job reduction costs.

Analysts surveyed by Thomson First Call had predicted FedEx earnings of $1.21 a share for the fourth quarter and $3.40 a share for all of fiscal 2004.

For next year, the company predicts earnings of $4 to $4.20 a share. Analysts expect earnings of $4.05 a share.

"We expect fiscal 2005 to be a strong year for FedEx, with very good improvement in our operating margin, earnings per share, cash flow and returns," chief financial officer Alan B. Graf Jr. said in a statement. "Our optimism stems from increasing customer demand for services in all business segments, a lower cost structure at FedEx Express and improving economic conditions."

The job reduction program that ended late last year cut the payroll at FedEx Express by 3,600 employees.

FedEx shares fell $1.24, or 1.7 percent, to close at $73.82 on the New York Stock Exchange.