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FedEx shares dropped in after-hours trading on Tuesday after the package delivery company revealed disappointing profits in its most recent quarter.

The Tennessee-based company posted adjusted profits of $2.35 a share in the fiscal third quarter, which ended February 28. Wall Street analysts had projected EPS of $2.62.

Revenues rose to $15bn, from $12.7bn in the same three-month period in the previous year, matching estimates.

The company’s shares dropped by almost 3 per cent in after-hours action. They had been up by 3 per cent year-to-date as of Tuesday’s close.

FedEx said that the results were impacted by the “significantly negative” impact of fuel prices and one fewer operating day at its FedEx Express and FedEx Ground units. It was also impacted by a an expansion of its ground network.

“These factors were partially offset by the benefits from yield growth at all of the company’s transportation segments,” FedEx said.

Net income was $562m in the fiscal third quarter, up from $507m in the same quarter in the previous year.

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