FedEx Kinko’s costs to continue in fiscal 2005

FedEx has revealed that its FedEx Kinko’s unit will continue to be weighed down by sizeable one-time costs in the 2005 fiscal year.

Costs related to the merging of the unit into the FedEx family in March dragged down Kinko’s earnings in Q1. Figures for the quarter, ending 31 August, were below Q4 levels, with revenue of $490 million and operating income of $19 million, despite the company describing commercial demand as "strong".

However, the transition is almost a third complete and the company is now concentrating on ensuring the unit has the full FedEx stamp on it by the end of fiscal 2005.

Kinko’s unit CEO Gary Kusin added that the group will continue to target large commercial customers.

• Total Q1 sales at FedEx rose 23 per cent to hit $6.98 billion while net income reached $330 million compared to $128 million a year earlier.

Memphis (TN)