by Yasin Ebrahim
Investing.com - FedEx (NYSE:FDX) Tuesday trimmed its full-year outlook and first-quarter profit that fell short expectations as higher labor costs weighed on performance.
FedEx shares lost 2.13% in after-hours trade following the report.
FedEx announced earnings per share of $4.37 on revenue of $22.00 billion. Analysts polled by Investing.com anticipated EPS of $4.94 on revenue of $21.9 billion.
"First quarter operating results were negatively affected by an estimated $450 million year over year increase in costs due to a constrained labor market which impacted labor availability, resulting in network inefficiencies, higher wage rates, and increased purchased transportation expenses," the company said.
Looking ahead, the company reduced its earnings outlook to reflect first quarter results, which were lower than the company’s June forecast.
"As conditions during the first quarter were more challenging than anticipated and are now expected to extend longer, the revised FedEx outlook also reflects management’s updated expectations for the remainder of the fiscal year," the company said.
Expectations for earnings per diluted share were trimmed to between $18.25 to $19.50 before the MTM retirement plan accounting adjustments, compared to the prior forecast of $18.90 to $19.90 per diluted share.
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