FedEx Corp (FDX.N) reported a higher-than-expected quarterly profit, as the package delivery company benefited from its TNT Express acquisition and higher sales across its express, ground and freight business units.Shares of the company, often considered a bellwether for the U.S. economy like rival United Parcel Service Inc (UPS.N), rose 1.5 percent in after-market trading on Tuesday.FedEx forecast adjusted earnings of $13.20 to $14 per share for fiscal 2018, excluding mark-to-market pension adjustments and TNT Express integration expenses.Sales in its biggest business, FedEx Express, rose 6.9 percent to $7.18 billion. The business provides U.S. domestic and international shipping services for delivery of packages and freight.
Sales in its ground business unit rose 9.1 percent and freight business 5.7 percent.FedEx and UPS have been spending billions of dollars in upgrading their networks to handle rapidly rising e-commerce package volumes, leaving investors chafing over the expense.
UPS said on Monday it will levy surcharges on U.S. residential packages during its crucial peak holiday season this year as it seeks to combat the spiraling costs of delivering e-commerce packages.FedEx posted a net income of $1.02 billion, or $3.75 per share, in the fourth quarter ended May 31, compared with a net loss of $70 million, or 26 cents per share, a year earlier.
On an adjusted basis, the company earned $4.25 per share. FedEx had incurred some charges related to TNT Express acquisition a year earlier.Revenue rose 21.2 percent to $15.73 billion.Analysts on average were expecting a profit of $3.88 per share and revenue of $15.56 billion, according to Thomson Reuters I/B/E/S. (Reporting by Arunima Banerjee in Bengaluru; Editing by Arun Koyyur)
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Updated Date: Jun 21, 2017 02:45:05 IST