FedEx now expects its Q2 profits to drop only 30% compared to last year following a steady recoveryin US and international volumes from September to November. In Europe, it predicts an 18%
year-on-year volume increase for the Christmas period.The US group said late yesterday that it expects to report earnings of $1.10 per dilutedshare for the second quarter ended November 30, down 30% from $1.58 per diluted share a year ago.The company’s previous guidance for the quarter was $0.65 to $0.95 per diluted share. FedEx willrelease detailed Q2 results and update its earnings outlook on December 17, 2009.
“FedEx will exceed previous earnings guidance in the second quarter primarily due tobetter-than-expected growth in FedEx International Priority and FedEx Ground volumes, coupled withthe benefits of our continuing cost control programs,” said CFO Alan Graf.
“Year-over-year growth in our US overnight express and FedEx International Priority servicesincreased each month during the quarter, aided by inventory restocking and our successful salesefforts. Demand for our international services has improved significantly since the first quarter,particularly in Asia and Latin America,” he commented.
Meanwhile, FedEx Express Europe is preparing for its busiest week of the year starting 14December with 50 million parcels delivered by the company’s network and an expected increase in itsEuropean shipment volumes of 18% compared to last year. The busiest day of the year is expected tobe 16 December.
Like every year, FedEx Express is taking all the necessary measures to ensure parcels arriveon time for the holiday season. For last-minute shipments to arrive before Christmas, the shippingdeadline is 23 December for Europe and the USA and 22 December for Asia.
“As a global company, we fully understand the specific needs of our customers and are awareof their confidence in FedEx Express,” said Alain Chaille, Vice President Operations SouthernEurope at FedEx Express. “With a big choice of express delivery services covering nearly allcustomer needs and responding to all budgets, FedEx Express is ready to offer its customers anexceptional service during and after the holidays.”
In addition to the traditional spending at the end of the year, consumers are buying more onthe internet this year thus increasing the number of parcels handled by FedEx Express. Withcustomers spending more time on the Internet, e-commerce is expected to generate significantadditional activity this year, FedEx said.
According to a study conducted by the global marketplace eBay, 85% of European consumers willeffect at least as many purchases online as in 2008. 4 customers out of 10 admitted buying moreonline this year particularly due to the difficult economic environment that has limited sales insupermarkets before the holidays.
Another study conducted by Fevad (French federation of e-commerce and distance selling) alsoreveals that 70% of French internet users interviewed plan to buy their presents on the internet,compared to 68% during the same period last year.
“The trend is dynamic. We noticed that the difficult economic environment favours e-commerceat the expense of traditional retail,” Chaille added. “In many respects, we believe that this trendwill be our main growth driver for the next few years.”
