- Company says holiday shipments at record on rising e-commerce
- Results overcame slowing industrial production, world trade
FedEx Corp. shares surged after reporting quarterly profit that beat analysts’ estimates and saying the growth in e-commerce is resulting in record holiday shipments so far this season.
The shipping company also maintained it full-year profit forecast. The performance highlights the benefits of a $1.7 billion profit-improvement plan FedEx put in place three years ago as well as increased revenue from a new pricing system based on the weight and size of the package.
- Adjusted earnings, which exclude some items, were $2.58 a share for the quarter that ended Nov. 30. The average of 25 analysts’ estimates was $2.50.
- Sales in the quarter were $12.5 billion, a 5 percent increase from a year earlier. Analysts had estimated $12.4 billion.
FedEx posted solid earnings “despite continued weakness in industrial production and global trade,” Chief Executive Officer Fred Smith said in a statement Wednesday.
FedEx operates the world’s largest cargo airline, as well as a fleet of package
delivery trucks and a freight operation, moving goods as diverse as financial
documents, pharmaceuticals and electronics around the globe. As such, it’s
viewed by some as a U.S. economic bellwether.
FedEx rose as much as 5.7 percent after the market close in New York. The shares had fallen 14 percent this year through the end of regular trading.
FedEx’s international priority shipments fell 5 percent in the quarter. U.S. exports account for about 10 percent of FedEx revenue, about twice the amount at United Parcel Service Inc., according to Scott Group, a Wolfe Research LLC analyst. A stronger dollar makes U.S.-produced goods more expensive, reducing demand from other countries and pressuring domestic manufacturers.