FedEx’s Smith: “Worst Behind Us”

FedEx reported an $876 million net loss in its fiscal fourth quarter ending May 31 on Wednesday but company chief Frederick Smith said he believes the economy likely appears to have reached the bottom.

“We believe the worst of the recession is likely behind us,” Smith told a conference call on FedEx’s report on its 2009 fiscal year. “We do see signs of stability.” Those include stabilizing declines in express traffic and broader reports on the economy that suggest companies will begin restocking depleted inventories even if the economy remains weak.

What Smith called the “most difficult economic conditions in our company’s history” sent overall revenue at FedEx down 20 percent in its fiscal fourth quarter, to $7.85 billion. FedEx’s $876 million net loss was more than triple the $241 million net loss FedEx reported in the last quarter a year ago and the company reported an $849 million operating loss.

The loss includes steep declines at the express and FedEx Freight trucking segments, but the parcel FedEx Ground operation defied the downturn with a $203 million operating profit that was stable from last year while revenue declined just 1 percent, to $1.7 billion.

But the core FedEx Express operation saw revenue fall 25 percent in the fourth quarter as yield fell 17 percent, leaving the unit with a $136 million operating loss.

The less-than-truckload unit lost $106 million in the quarter as revenue fell 28 percent.