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FedEx Corp. ‘s quarterly profit nearly tripled and revenue rose 23%, despite the winter storms in the US disrupting its delivery operations and accelerating its profit by $ 350 million.
The package giant, like rival United Parcel Service Inc., handled an increase in e-commerce orders during the COVID-19 pandemic as more people bought from home. Executives said Thursday they expect the trend to continue even if vaccines are expanded.
“We expect demand for our unmatched e-commerce and international express solutions to remain very high in the foreseeable future,” CEO Fred Smith said in a statement.
FEDEX IS READY FOR ADDITIONAL COVID-19 SUBJECT DIVISION
In the quarter ended February 28, FedEx’s package volumes rose 25% in its Ground unit, handling most of its e-commerce deliveries and the bulk of holiday shopping orders. The company recorded a 29% increase in volumes in the Ground unit during the quarter ended November 30th.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| FDX | FEDEX CORP. | 264.36 | -1.29 | -0.49% |
| UPS | UNITED PARCEL SERVICE, INC. | 160.20 | -0.58 | -0.36% |
For the Express business, which handles overnight and international shipments, daily parcel volume rose 12.2% during the quarter. The average revenue per package for the Express business was $ 19.21, compared to $ 9.72 for the Ground unit.
FedEx has struggled for weeks with significant delays after the winter storms in February deep-frozen many parts of the country, including its main sorting point in Memphis, Tennessee. FedEx said it added shifts to catch up, but customers said the delays continued.
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To manage pandemic demand, FedEx and UPS have raised prices, enforced volume limits and added surcharges. UPS tel Amazon.com Inc. among its biggest customers, while FedEx severed ties with Amazon in 2019 and focused on targeting its competitors such as Target Corp. and Walmart Inc.
FedEx has benefited from lower jet fuel prices over the past year, but costs increased in the last quarter when it paid $ 1.54 per liter, compared to $ 1.22 in the previous quarter. In the quarter of last year, the cost was about $ 2 per liter.
Overall, FedEx’s net income nearly tripled from a year ago to $ 892 million. The quarterly fiscal quarterly revenue reached $ 21.5 billion, compared to $ 17.5 billion in the same period a year ago. The results were above Wall Street’s expectations, which according to FactSet were looking for about $ 20 billion in quarterly revenue.
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FedEx also issued a financial forecast for the last months of its financial year, which ends in May.
The company expects earnings per share of $ 17.60 to $ 18.20, excluding adjustments to its retirement plan and refinancing, restructuring and transaction costs. Wall Street expects adjusted earnings of approximately $ 17.56 per share.