FedEx Corporation (NYSE:FDX) released the results from its third fiscal quarter of 2014 before opening bell this morning, posting higher revenue but missing on expectations. The delivery carrier reported adjusted earnings per share of $1.23 and GAAP earnings per share of $1.13. Profits rose 5% to $378 million, compared to $361 million in the same quarter a year ago. Revenue was $11.3 billion for the holiday quarter.

Fedex

Analysts had been expecting earnings of $1.46 per share on revenue of $11.43 billion for the quarter.

FedEx says results impacted by winter weather, realignment

FedEx Corporation (NYSE:FDX) reported that “unusually severe winter storms throughout the quarter disrupted operations, decreasing shipping volume and increasing costs.” The company estimates that the weather had an approximate negative impact of $125 million.

“Historically severe winter weather significantly affected our third-quarter earnings,” said Frederick W. Smith, FedEx Corporation (NYSE:FDX) chairman, president and chief executive officer in a statement. “On days when the weather was closer to normal seasonal conditions, our volumes were solid and service levels were high. The FedEx strategy of maintaining separate express and ground networks with multiple hubs proved to be an especially important advantage for our package customers during this quarter’s severe weather and peak shipping.”

In addition, FedEx noted a negative impact of about $47 million due to realignment costs, most of which were related to the voluntary buyout program for eligible U.S. officers and managing directors. Another negative net impact during the quarter was the cost of fuel. Having one extra operating day in each transportation segment partially offset some of these negative impacts.

Breaking down FedEx’s results

FedEx Corporation (NYSE:FDX) reported that revenue from its FedEx segment fell slightly year over year to $6.67 billion. Operating income for the segment was $135 million, a 14% increase, and operating margin was 2%, a slight increase from the previous year. Management said revenue fell slightly because of lower freight revenue, lower fuel surcharges and the weather.

FedEx Corporation (NYSE:FDX)’s ground segment reported $3.03 billion in revenue, a 10% increase, and $477 million in operating income, a 2% increase year over year. Operating margins were 15.7%, down from 17% last year.

Freight shipments had revenue of $1.35 billion, a 9% increase from last year, and operating income of $29 million, a significant year over year increase. Operating margin was 2.2%, up from .3% last year.

FedEx buys back shares, guides for Q4

FedEx Corporation (NYSE:FDX) began an accelerated share buyback program, repurchasing an aggregate of $2 billion of its shares. However, those share repurchases had just a minimal positive impact on third quarter earnings per share.

FedEx Corporation (NYSE:FDX) said it expects full-year 2014 earnings per share to be between $6.55 and $6.80 a share. For the current quarter, the delivery carrier expects earnings per share to be between $2.25 and $2.50 a share.

The company also said it plans to increase certain shipping rates in the U.S. by an average of 3.9% starting March 31.