FedEx Quarterly Profit of $1.25 Billion Beats Estimates Easily As Residential Deliveries Jump
15 September 2020
By Cathy Bussewitz
NEW YORK (AP) — FedEx’s profit jumped 67% in its latest quarter, as online shopping soared among customers avoiding stores and shipments between businesses improved.
The delivery giant reported Tuesday that it earned $1.25 billion during the three months that ended Aug. 31, FedEx’s fiscal first quarter. That was up from $745 million a year earlier.
Its revenue rose to $19.32 billion, up 13% from $17.05 billion in last year’s quarter.
“The growth that we expected to see over a period of three to five years happened in a period of three to five months,” said Raj Subramaniam, president and chief operating officer at FedEx, in a conference call with investors.
Delivery of large packages, furniture and high-value electronics to homes increased, said Brie Carere, executive vice president and chief marketing and communications officer. Shoppers who are over 65 years old “finally moved to online,” and “from an e-commerce perspective I do not anticipate that these buying behaviors will revert back” after the pandemic, she said.
FedEx’s earnings amounted to an adjusted $4.87 a share. That was well ahead of the $2.70 per share expected on average by Wall Street analysts polled by FactSet.
FedEx’s stock jumped 8% in after-hours trading.
Many people are shopping online during the pandemic, which is helping some delivery companies despite widespread economic pain.
“Not all facets of the economy are great right now, far from the case, but when you think about the rising tide that is e-commerce, it’s definitely a powerful thing for a company like FedEx to harness, given the delivery network they have that’s ready to go,” said Matt Arnold, industrials analyst for Edward Jones.
But delivery to homes is less profitable than those between businesses, and business deliveries slowed as the pandemic dragged on and some establishments remained shuttered. FedEx also saw some expenses increase as it purchased personal protective equipment and enhanced cleaning routines to keep its workers safe.
The Memphis-based company did not provide an outlook for the full 2021 fiscal year.
“While business demand improved in the first quarter, continued uncertainties cloud our ability to forecast full-year earnings,” said Alan B. Graf, Jr., FedEx’s chief financial officer.
Revenue in its core Express segment grew to $9.65 billion in the quarter, up from $8.95 billion at the same time last year. Its Ground service grew to $7.04 billion in revenue, up from $5.18 billion at the same time last year.
FedEx is raising its shipping rates by 4.9% for its Express, Ground and Home Delivery services and 4.9% to 5.9% for Freight, beginning in January.
“We’re going into the so-called peak delivery season for the holiday, and we’re seeing e-commerce growth that looks like the holidays, so it’s giving them confidence that they can raise their prices,” Arnold said.
FedEx also has said it plans to hire up to 70,000 seasonal workers to handle extra holiday deliveries, a jump from 55,000 last year.
Successful Trading is the art of minimizing long term risk and maximizing capital allocation.
Recent BIGC News
- Fashion and Lifestyle Brand MUJI Launches on BigCommerce to Drive European Growth • Business Wire • 05/14/2024 12:00:00 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/09/2024 11:21:32 AM
- Form S-8 - Securities to be offered to employees in employee benefit plans • Edgar (US Regulatory) • 05/09/2024 11:16:04 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/09/2024 11:10:49 AM
- BigCommerce Announces First Quarter 2024 Financial Results • GlobeNewswire Inc. • 05/09/2024 11:00:00 AM
- BigCommerce Open Sources B2B Edition Buyer Portal, Giving B2B Enterprise Customers Full Control to Build and Customize Optimal Buyer Experiences • Business Wire • 05/07/2024 12:00:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/06/2024 12:10:34 PM
- Travis Hess to Join BigCommerce as Company President • Business Wire • 05/06/2024 12:00:00 PM
- BigCommerce with Amblique Fires up Growth for Barbeques Galore with Launch of New B2B Storefront • Business Wire • 04/29/2024 12:00:00 PM
- BigCommerce Named a Leader in IDC MarketScape: Worldwide B2C Digital Commerce Applications for Enterprise 2024 Vendor Assessment • Business Wire • 04/24/2024 12:00:00 PM
- BigCommerce Global Partner Awards Recognize Outstanding Achievements Celebrating Exceptional Contributions in Ecommerce • Business Wire • 04/18/2024 12:00:00 PM
- BigCommerce Unveils The Next Big Thing: 100+ New and Innovative Features and Partner Integrations to Empower Brands and Retailers for Growth and Success • Business Wire • 04/17/2024 12:00:00 PM
- BigCommerce to Announce First Quarter 2024 Financial Results on May 9, 2024 • GlobeNewswire Inc. • 04/10/2024 08:30:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 03/08/2024 10:28:09 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/07/2024 10:37:04 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/07/2024 10:36:50 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/07/2024 10:36:39 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 03/07/2024 10:36:28 PM
- BigCommerce to Present at Canaccord Genuity eCommerce Forum • GlobeNewswire Inc. • 02/29/2024 09:05:00 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 02/29/2024 06:35:14 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/28/2024 01:29:18 AM
- TechBlocks Joins BigCommerce Agency Partner Program • Business Wire • 02/27/2024 06:09:00 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 02/27/2024 01:27:29 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/22/2024 12:25:23 PM
- BigCommerce Announces Fourth Quarter and Fiscal Year 2023 Financial Results • GlobeNewswire Inc. • 02/22/2024 12:00:00 PM
FEATURED POET Announces Design Win and Collaboration with Foxconn Interconnect Technology for High-speed AI Systems • May 14, 2024 10:09 AM
FEATURED Element79 Gold Corp Reports Exceptionally High-Grade Results from Lucero • May 14, 2024 7:00 AM
VAYK Added New Manager for Expansion into $64 Billion Domestic Short-term Rental Market • VAYK • May 14, 2024 9:00 AM
Avant Technologies Equipping AI-Managed Data Center with High Performance Computing Systems • AVAI • May 10, 2024 8:00 AM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM