Delivery and logistics company FedEx Corp. (NYSE:FDX) reported a blockbuster quarter, buoyed by increased prices and strong sales during the Christmas holiday season.
FedEx reported stronger e-commerce deliveries and signaled strong momentum for the full year as the U.S. economy recovers from the global pandemic. Adjusted earnings for the quarter came to $3.47 U.S. a share, beating analysts’ expectations of $3.22 U.S., FedEx said in a statement Thursday after financial markets closed.
The company said surging package volumes and higher prices offset higher-than-expected expenses from labour costs and poor weather during the quarter. Winter storms cut operating income by $350 million U.S. after severe snowfall blanketed the southern U.S., including FedEx’s largest hub in Memphis, Tennessee.
Sales climbed 23% to $21.5 billion U.S. from a year earlier but operating margins of 4.9% fell short of analyst expectations of 5.9%. Margins had tumbled to 2.8% last year as COVID-19 began to initially spread.
FedEx said Express sales rose 21% to $10.8 billion U.S. and Ground revenue jumped 37% to $8 billion U.S.
FedEx provided a bullish forecast for the full year, the first guidance it has issued since suspending its outlook 12-months ago amid uncertainty about the pandemic. The company projected per share earnings for the year ending May 31 of $17.60 U.S. to $18.20 U.S., which is higher than analysts’ estimates of $17.40 U.S.
Shares of FedEx rose 2.8% in after-hours trading in New York Thursday. FedEx has climbed 2.4% year-to-date, trailing a 5.8% gain for the Standard & Poor’s 500 Index. FedEx’s share price rose 72% in 2020.
