FedEx today announced it now expects higher profits for the June-August first quarter of its2010/11 fiscal year thanks to good growth in express and ground parcel volumes. The news follows
strong April – June Q2 results at UPS and comes ahead of Q2 results from TNT and Deutsche PostDHL.FedEx Corporation said it expects Q1 earnings to be in the range of $1.05 to $1.25 per dilutedshare for the first quarter ending August 31, up 81% to 116% from $0.58 per diluted share a yearago. The company’s previous guidance for the quarter was $0.85 to $1.05 per dilutedshare.
For the full year, FedEx expects earnings per diluted share of $4.60 to $5.20, up from $4.40to $5.00, which reflects the current market outlook for fuel prices and a continued moderaterecovery in the global economy. The company reported earnings of $3.76 per diluted share lastyear.
“Our revenue and earnings growth are exceeding original expectations, primarily due tobetter-than-expected growth in FedEx Express and FedEx Ground volumes,” said Alan B. Graf Jr.,FedEx Corp. executive vice president and chief financial officer. “Our package volume growthrates in our first quarter are continuing at a pace similar to our fourth quarter.”
Graf added: “Of particular benefit to our earnings is the continued strong demand for ourhigher-margin FedEx International Priority (IP) package and freight services, with IP packagevolumes expected to grow more than 20% again this quarter. Customers are favourably respondingto our superior service offerings, the capabilities of our unparalleled global network and thebest-in-market cut-off times we now offer from numerous points in Asia.”
With the improved outlook, FedEx is also planning to fully restore the company match for401(k) plans at all FedEx companies effective January 1, 2011. The cost of this restoration isincluded in the company’s earnings outlook. FedEx will release detailed Q1 results on September 16,2010.
On July 22, UPS reported a 13% rise in Q2 revenues, including a 23% increase in internationalpackage revenues. Group operating profit soared 57%, including a 78% rise in international packageprofits.
TNT will release Q2 results on August 2, while Deutsche Post DHL follows with its Q2 results onAugust 3.
