FedEx Profit Pressured by Express Unit's Woes — Update

The company has been restructuring its operations to adjust to the rise of e-commerce orders and combat slowing international shipping. It recently ended a key contract with Amazon.com Inc. and announced plans to offer seven-day home delivery and to handle more of the packages it used to route through the U.S. Postal Service.

“We have to be very efficient in delivering to residential — making residential deliveries, which are an increasing part of the traffic moving through both the Ground and the Express network,” FedEx founder and Chief Executive Fred Smith said on a conference call Tuesday.

FedEx’s operating income declined less than 1% in the quarter that ended May 31 to $1.32 billion due to lower revenues at its Express air network and higher costs at its Ground business. FedEx said those expenses were partially offset by increased U.S. shipment volumes.

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