For FedEx, Covid-19 Pandemic Keeps Delivering Profit
18 Mars 2021 - 10:55PM
Dow Jones News
By Thomas Gryta
FedEx Corp.'s quarterly profit nearly tripled and revenue jumped
23%, despite winter storms in the U.S. that disrupted its delivery
operations and sapped its profit by $350 million.
The package giant, like rival United Parcel Service Inc., has
been handling a surge in e-commerce orders during the Covid-19
pandemic as more people shop from home. Executives said Thursday
they expected that trend to persist even as vaccines roll out.
"We expect demand for our unmatched e-commerce and international
express solutions to remain very high for the foreseeable future,"
Chief Executive Fred Smith said in a statement.
In the quarter ended Feb. 28, FedEx's package volumes rose 25%
in its Ground unit, which handles most of its e-commerce deliveries
and the bulk of its holiday shopping orders. The company logged a
29% surge in volumes in the Ground unit during the quarter ended
Nov. 30.
For the Express business, which handles overnight and
international shipments, daily package volume rose 12.2% in the
quarter. Average revenue per package for the Express business was
$19.21, compared with $9.72 for the Ground unit.
FedEx struggled with significant delays for weeks after February
winter storms sent many parts of the country into a deep freeze,
including its major sorting hub in Memphis, Tenn. FedEx said it
added shifts to catch up with the backlog, but customers said
delays persisted.
To manage the pandemic-fueled demand, both FedEx and UPS have
been raising prices, enforcing volume limits and adding surcharges.
UPS counts Amazon.com Inc. among its biggest customers, while FedEx
broke ties with Amazon in 2019 and has focused on serving its
competitors like Target Corp. and Walmart Inc.
FedEx benefited from lower jet fuel prices over the past year,
but that cost crept up in the latest quarter when it paid $1.54 a
gallon, up from $1.22 in the previous quarter. In the year-ago
quarter, that cost was about $2 a gallon.
Overall, FedEx's net income nearly tripled from a year ago to
$892 million. Quarterly revenue in the fiscal third quarter reached
$21.5 billion, up from $17.5 billion in the same period a year ago.
The results were above Wall Street's expectations, which were
looking for about $20 billion in quarterly revenue, according to
FactSet.
FedEx also issued a financial forecast for the final months of
its fiscal year, which ends in May.
The company expects per-share earnings of $17.60 to $18.20,
excluding adjustments for its retirement plan and debt refinancing,
restructuring and deal costs. Wall Street is expecting adjusted
profit of around $17.56 a share.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
March 18, 2021 17:40 ET (21:40 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
United Parcel Service (NYSE:UPS)
Graphique Historique de l'Action
De Juil 2024 à Août 2024
United Parcel Service (NYSE:UPS)
Graphique Historique de l'Action
De Août 2023 à Août 2024