FedEx Q2 profit up 14% as cost cut plan delivers

[DALLAS] FedEx Corp said fiscal second-quarter profit rose 14 per cent as the operator of the world's largest cargo airline began seeing initial results from a US$1.7 billion, three-year cost reduction plan.

Net income rose to US$500 million, or US$1.57 a share, the company said on Wednesday. Earnings on that basis fell short of the US$1.65 average of analysts' estimates compiled by Bloomberg, partly because of a reduced operating margin at its FedEx Ground unit.

Improved international yields and operating margin growth at FedEx Express showed some success in efforts to counter a shift by customers away from expensive overnight shipping methods, said Logan Purk, an Edward Jones & Co analyst.