Shares at FedEx Corporation fell by up to 2% on Wednesday morning in premarket trading. The company released its quarterly results from its fiscal third quarter for 2014 prior to the market’s opening bell.
The company posted higher revenues but they missed expectations. FedEx reported its earnings were $1.23 per share and is GAAP earnings were $1.13 per share.
Profits increased by 5% to over $378 million, compared to the same quarter one year ago when they were $361 million. Revenue ended at $11.2 billion for the quarter that included the holiday shopping season.
Analysts were expecting FedEx earnings to be $1.46 a share on $11.43 billion in revenue for the recently ended quarter.
FedEx said the results were impacted by the severe weather during the winter. The weather was unusually severe throughout the quarter, which disrupted the operations, lowering the volume of shipping and increasing overall costs.
FedEx estimates the weather caused a $125 million negative impact on the quarter.
In addition, the company noted that there was another negative impact of $47 million for realignment costs of which most had been related to voluntary buyout programs for managing directors and officers in the U.S. who were eligible.
Another net impact that was negative in the quarter was fuel costs. Having an extra day in each of the transportation segment offset partially some of the negative impacts.
Operating income from the FedEx segment was over $135 million, which was an increase of 14%, with a 2% operating margin. That was a slight increase from the previous year. Management announced that revenue dropped slightly due to lower revenue from freight, lower surcharges for fuel and the severe weather.
The ground segment for FedEx reported over $3.02 billion of revenue, an increase of 10% along with an operating income of more than $477 million, which was an increase of 2% from last year.
Operating margins fell to 15.7% from last year’s 17%.
Freight shipments created $1.35 billion in revenue, an increase of 9% from the same period one year ago. Operating income topped $29 million, while it experienced a 2.2% operating margin that was up from last year’s 0.3%.