FedEx Corp. late Thursday reported fiscal third-quarter profit and sales that blew Wall Street expectations out of the water, saying that it expects demand for its logistics and delivery business “to remain very high for the foreseeable future.”
FedEx
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said it earned $892 million, or $3.30 a share, in the quarter, compared with $315 million, or $1.20 a share, in the third quarter of fiscal 2020. The stock rose nearly 2% in the extended session after ending the regular trading day down 0.9%.
Adjusted for one-time items, the logistics giant reported earnings of $939 million, or $3.47 a share, compared with adjusted EPS of $1.41 a share a year go.
Revenue rose to $21.5 billion from $17.5 billion a year ago.
Analysts polled by FactSet had expected adjusted earnings of $3.30 a share on sales of $19.97 billion.
The company pinned the rise in profit and sales on “strong volume growth” in U.S. domestic residential-package deliveries amid pandemic-related online shopping and FedEx’s international services. These were partly offset by costs “to support strong demand and expand services, variable compensation expense, higher labor rates and one fewer operating weekday,” it said.
The company guided for fiscal 2021 earnings between $16.80 a share and $17.40 a share before adjustments related to its retirement plans. It called for adjusted earnings between $17.60 a share and $18.20 a share for the year.
Capital spending was seen around $5.7 billion, an increase from a prior forecast due to changes in the timing of aircraft payments and an “acceleration” in its ground deliveries capacity expansion, it said.
Severe winter weather in February reduced FedEx’s quarterly operating income by an estimated $350 million, and hampered operations at several of the company’s largest facilities, including its primary FedEx Express hub in Memphis and FedEx Express hubs in Indianapolis and North Texas, it said.
The stock has gained 165% in the last 12 months, compared with gains around 64% for the S&P 500 index
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