Wednesday, September 21, 2016
FedEx beats on earnings, shares rise
FedEx on Tuesday reported better-than-expected earnings for its fiscal first quarter.
The courier giant said its operating results were boosted by higher volumes of FedEx Ground shipments, as well as cost reductions at FedEx Express. But costs associated with integrating TNT Express, the delivery company it bought in May, dented some of these gains.
It reported adjusted earnings per share of $2.90, beating analysts' median forecast for $2.79, according to Bloomberg. Revenue totaled $14.7 billion, a hair above the forecast for $14.6 billion.
"Our team is extremely excited about the TNT Express integration, and we are discovering many possibilities for achieving high returns," said Alan Graf, executive vice president and chief financial officer, in the earnings release.
Ecommerce-package growth boosted average daily volume growth at FedEx ground, amid slightly lower fuel costs.
FedEx said it was unable to provide unadjusted earnings guidance because it cannot forecast the fiscal 2017 year-end mark-to-market pension accounting adjustments. This accounting method makes it easier for investors to glean how pension plans are performing from the income statement.
On an adjusted basis, the company forecast EPS in a range of $10.85 to $11.35, falling short of analysts' estimates.
The company's shares gained 1% in after-hours trading. They have rallied 9% this year.