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FedEx Sees Earnings Topping Already High Forecasts

By Reuters
Published | Updated

MIAMI – FedEx Corp. (FDX), the world's No. 1 air-express group, on Thursday reported strong, across-the-board demand for its shipping services and said quarterly earnings would top already heightened expectations.

The global transport group, based in Memphis, Tenn., said it expects net income of $1.36 per share for its fiscal fourth quarter ended May 31, up from 92 cents a year earlier.

Excluding restructuring costs, it will report $1.37 per share, it said, exceeding its previous forecast of $1.20 to $1.30. On that same basis, Wall Street analysts were looking for $1.25 per share, according to Reuters Estimates.

FedEx shares rose 1.8 percent in early trade.

"We are seeing strong demand across our entire portfolio of services, both domestic and international," CEO Fred Smith said in a statement. "We continue to see strong and sustainable economic recovery across many sectors of the economy that we serve."

FedEx and other companies, which carry a wide range of goods from costly high-tech parts to retail items and documents, are closely tied to overall economic activity.

FedEx gave no particulars on the fiscal fourth quarter but in April told analysts ground deliveries in the United States and its China business were particularly strong.

In mid-March, FedEx established an initial forecast for the quarter of $1.15 to $1.25 per share, then raised its outlook to $1.20 to $1.30 less than a month later. The company, which in February completed the acquisition of the Kinko's chain of business-services centers, is to report quarterly results on June 23.

The company reported better-than-expected earnings in the fiscal third quarter, saying it saw strengthening economies around the globe.

FedEx shares, which touched seven-month highs this week, rose $1.39 to $77.40 on the New York Stock Exchange (search).

Since the start of the year, the stock has outperformed the Dow Jones transports index (search), of which it is a component, by 11 percent and top rival United Parcel Service Inc. (UPS) by 13 percent.