HomeeCommerce NewsFedEx reports bigger-than-expected profit amidst pandemic fueled growth

FedEx reports bigger-than-expected profit amidst pandemic fueled growth

FedEx Corporation, the American  MNC delivery services company headquartered in Memphis, Tennessee, has come out with a bigger-than-expected quarterly profit on Tuesday. Shares of the company jumped 7.6% to $254.66 in extended trading.

The surge comes amidst the ongoing coronavirus times as price hikes, lower fuel costs, and efficiency gains countered negative impacts associated with a pandemic-fueled surge in online delivery bulk orders.

The numbers said it all as the average daily package volume for FedEx Ground, which handles e-commerce deliveries for retailer giants such as Walmart, jumped by 31% to 11.6 million during the fiscal first quarter ended Aug. 31.

Additionally, revenue per package rose 2% to $9.33 during the quarter, which also included one additional business day.

The coronavirus pandemic pushed the online delivery business to its core as people adhered to safe distancing norms and sought home delivery from anything to everything. People placed orders from exercise equipment to home furniture and even snacks and pet food. For FedEx and rival UPS, it was boom time.

Traditionally, home deliveries have been more expensive because they involved fewer packages and far-flung stops. The pandemic saw a rush in orders and rising volumes and investments in things like automated sorting centers and route optimization are now focusing on bringing these costs down.

Edward Jones analyst Matt Arnold said, “Minor improvements can make a big difference whenever you’re moving this many packages a day. The worst of the pressures on profitability are probably behind the company.”

FedEx did not provide an earnings forecast for fiscal 2021, citing continued uncertainty, but said it expects annual capital spending of $5.1 billion, above analysts’ average estimate of $4.96 billion, as per reports of Refinitiv data.

FedEx spent $565 million on fuel across the company during the quarter, 35% less than a year earlier. Fiscal first-quarter adjusted net income at FedEx jumped 60% to $1.28 billion, or $4.87 per share as the revenue rose 13.5% to $19.3 billion.

Analysts expected earnings of $2.69 per share and revenue of $17.55 billion.

Sonali Minocha
Sonali Minochahttps://www.ecommercenext.org
Passionate about Innovation and Technology. I love to contribute to high impact projects/ products. I have co-created/contributed to technology solutions touching 100 million ++ humans. I am also fond of e-commerce & PIM solutions. As editor of eCommerceNext, I am bringing news, events, opinions, experts, reviews from the world of e-commerce and PIM Besides technology and innovation, I am usually involved in setting up and running complex operations and human capital systems. I have been grateful to be acknowledged by getting “Great Places to Work – Top 100”, “Great Places to Work – Top 50”, “Great Place to Work – Top 5” awards for my company. I am a people and relationship person and bring in a balance of empathy and realistic solutions. I thrive on building processes and building control systems. I led the team that achieved CMMI Level 3. I have managed large teams and in-turn managed projects worth 15-20 Million (Annually) Want me to cover an interesting story around eCommerce or PIM? Reach me on sonali@ecommercenext.org

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