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VOL. 37 | NO. 37 | Friday, September 13, 2013
FedEx says quarterly profit up 7 percent
MEMPHIS (AP) — FedEx says its quarterly profit rose 7 percent despite a dip in revenue in its FedEx Express unit, and it will raise prices in January.
The company says FedEx Express will raise U.S. rates by an average of 3.9 percent on Jan. 6. Prices for ground shipments in 2014 will be announced later this year.
Its shares rose almost 3 percent in premarket trading.
FedEx Corp. said Wednesday that it earned $489 million, or $1.53 per share, in the quarter ended Aug. 31. That's up from $1.45 per share a year ago, and beat analysts' forecast of $1.50 per share.
Revenue rose 2 percent to $11.02 billion, just above analysts' forecast of $11.00 billion.
FedEx left unchanged its forecast for full-year profit in the fiscal year that ends May 2014. It expects earnings per share to rise between 7 percent and 13 percent, which would be between $6.63 and $7.01. Analysts surveyed by FactSet expect $6.97 per share.
"We remain confident in our full-year earnings outlook despite tepid global economic growth," said chief financial officer Alan Graf. He said the company was committed to boosting FedEx Express' operating profit by $1.6 billion by the end of fiscal 2016. FedEx Express accounts for 60 percent of the company's revenue, but the unit's revenue was flat in the August quarter.
FedEx is still struggling with a decline in international priority deliveries as customers shift to less-expensive shipping options, and FedEx Express fuel surcharges fell from a year ago. The company says its ground business is still strongly profitable and it is cutting costs in the FedEx Express unit.
Its shares rose $3.13, or 2.8 percent, to $113.81 in premarket trading. If that carries over into regular market trading, it would top its 52-week high of $113.34 set Aug. 26.