FedEx Corp. reports quarterly profit increase of 7 percent
By David Koenig, APDALLAS--FedEx Corp. boosted quarterly profit by 7 percent this summer despite a dip in revenue at its express-delivery unit, and it will raise prices on many U.S. shipments in January.
September 20, 2013, 12:21 am TWN
The weak global economy is still creating turbulence in FedEx's air-shipment business. But its ground-shipping unit continues to churn out strong profit — operating income was twice that of the express business.
FedEx said Wednesday that it earned US$489 million in the June-through-August quarter, which topped analysts' expectations.
Shares of FedEx rose US$2.78, or 2.5 percent, to US$113.46 in morning trading after hitting US$115.52 earlier in the session — a 52-week high. They began the day up 21 percent so far this year and are approaching their highest price since early 2007, before the recession.
FedEx said that it will raise U.S. express-shipping rates by an average of 3.9 percent on Jan. 6. Prices for ground shipments in 2014 will be announced later this year; the freight segment imposed a 4.5 percent rate hike in July.
The company left unchanged its forecast for full-year profit in the fiscal year that ends in May 2014. It expects earnings per share to rise between 7 percent and 13 percent, which would be between US$6.63 and US$7.01. Analysts surveyed by FactSet expect US$6.97 per share.
“We remain confident in our full-year earnings outlook despite tepid global economic growth,” said chief financial officer Alan Graf.