FedEx 4Q profit rises on growth in ground shipping
DALLAS (AP) — FedEx Corp. says its quarterly profit rose as growth in online shopping gave its ground-shipping business a lift.
The earnings of $2.46 per share beat Wall Street's forecast by a dime. Revenue also topped expectations.
Its shares rose 4 percent in premarket dealings before the opening bell.
The package-delivery company said today that it earned $730 million in its fiscal fourth quarter, which ended May 31, compared with $303 million a year ago, when write-downs weighed on the results.
Revenue rose 3.5 percent to $11.84 billion. Analysts surveyed by FactSet expected $11.66 billion.
Revenue in the ground-shipping business grew 8 percent, helped by gains in e-commerce. That helped offset slower growth in FedEx Express, which accounts for more than half the company's revenue.
The Memphis-based company said that it would earn between $8.50 and $9 per share in the new fiscal year, which ends in May 2015. That is in line with analysts' average expectation of $8.74.
Last month, FedEx announced that it will start charging more for large but light packages that take up space in its delivery trucks and add to costs. That includes bulky products that consumers buy online instead of in stores. Rival United Parcel Service Co. said Tuesday that it would do the same by considering a bulky package's dimensions and not just its weight in setting prices for ground shipments.
The results marked an improvement over FedEx's third quarter, when the company was slowed by winter storms that raised costs and cut into shipping volumes. They also indicated that while e-commerce continues to boost the ground-shipping business, express-delivery remains virtually flat as customers shift to slower, cheaper services for international shipments.