Restructuring programs affected second-quarter earnings for FedEx Corp., the company said, while revenues of $664 million were up 5% from last year's $634 million.

Excluding costs for early retirement and severance programs, earnings for the second quarter were $0.87 per diluted share. Earnings were $0.81 per diluted share a year ago.
Operating income was $66 million, up 6% from $62 million a year ago.
"There was clear improvement in the Express cost structure this quarter, as evidenced by the higher operating income and margin before business realignment costs," said Alan B. Graf, Jr., executive vice president and chief financial officer. "We expect FedEx Corp. earnings per share for the fiscal second half to be substantially higher than last year's second half. We continue to examine cost reduction opportunities for fiscal 2004 and beyond in order to further improve profitability."
During the first half of 2004, voluntary early retirement incentives with enhanced pension and postretirement healthcare benefits were offered to certain groups of employees at FedEx Express who were age 50 or older.
About 3,600 employees accepted offers under these programs, substantially exceeding the company's expectations. The second quarter pretax cost of all of these programs was $283 million, including $7 million incurred in the other business units. For the fiscal first half, the cost of all these programs was $415 million.
The company expects the savings from these initiatives to be $135 million to $145 million in fiscal 2004, mostly in the fiscal second half and slightly higher than previous estimates.
Earnings are expected to be $0.60 to $0.70 per diluted share in the third quarter, excluding the costs of business realignment activities, compared to $0.49 per diluted share a year ago. Fiscal 2004 earnings are expected to be $3.30 to $3.40 per diluted share, excluding business realignment costs and a one-time tax benefit recorded in the first quarter.