FedEx’s profits beat revenue as e-commerce boom


A FedEx worker unloads packages from his delivery truck on March 31, 2020 in Washington, DC.

Attractor Grumpy | Getty Image News

Reduced price delivery, lower fuel costs and efficiency gains counted the negative effects associated with epidemic-fuel growth in e-commerce shipments, with US delivery firm FedEx expecting large profits quarterly on Tuesday.

The Memphis-based company shares jumped 7.6% to $ 254.66.

Average daily package volume for FedEx Ground, which handles e-commerce delivery for retailers such as Walmart, jumped 31% to 11.6 million during the first quarter ended August 31. 31. Revenue per package increased 2% to $ 9.33 during the quarter, including an additional business day.

Kovid-19 boosted operations at FedEx and rival United Parcel Service. Deliveries for business spurred delivery and high-cost residential deliveries as workers took shelter at home and placed online orders for everything from office furniture and exercise equipment to snacks and pet food.

Home deliveries have traditionally been more expensive because they included fewer packages and far-off stops. Increasing volumes and investments in such things as automated sorting centers and route optimization are driving those costs down.

Edward Jones analyst Matt Arnold said, “Whenever you’re rolling out multiple packages in a day, there may be a slight improvement. The worst pressure of profitability is behind the company.”

FedEx spent $ 565 million on fuel on the company during the quarter, down 35% from a year earlier.

According to refinitiv figures, FedEx did not provide an earnings estimate for FY 2021 citing financial uncertainty, but it expects annual capital expenditures of $ 5.1 billion with uncertainty.

FedEx’s first-quarter fiscal first quarter net income increased 60% to $ 1.28 billion, or $ 4.87 per share.

Revenue rose 13.5% to $ 19.3 billion.

Analysts were expecting earnings of $ 2.69 per share and $ 17.55 billion.

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