FedEx Quarterly Earnings Missing Wall Street Estimate

(Reuters) – FedEx Corp (FDX.N) announced a quarterly profit that missed Wall Street's estimates on Monday, as compensation for employees and other charges weighed on margins.

Shares of the Memphis-based parcel delivery company fell 2.2% to $ 249.99 after hours of sitting.

Net income jumped 40% to $ 835 million, or $ 3.10 per share, for the first fiscal quarter ended August 31.

According to Thomson Reuters I / B / E / S, earnings excluding items stood at $ 3.46 per share.

Revenues increased nearly 12% to $ 17.1 billion for the quarter, exceeding analysts' target of $ 16.9 billion.

FedEx has accelerated annual salary increases of $ 200 million until April, following the adoption of the US tax cuts and tax law of President Donald Trump. About two-thirds were for hourly workers, the remainder going for performance-based incentive schemes for employees.

This transaction contributed to compensation and other items that reduced results by 48 cents per share in the last quarter.

"As expected, the quarter's results were affected by our decision to invest in our team members as a result of the adoption of the law on tax cuts and jobs," said Alan Graf, chief financial officer of FedEx.

"We remain committed to increasing earnings, margins, cash flow and returns this year," said Graf.

To this end, FedEx increased its adjusted earnings guidance to $ 15.85 to $ 16.45 per diluted share from the previous range of $ 15.65 to $ 16.25. This forecast includes TNT Express integration fees.