FedEx profit leaps on rate hikes, e-commerce shipments

LOS ANGELES: US delivery firm FedEx Corp on Thursday said quarterly profit almost doubled after rate hikes and spiking volume helped lower the cost of delivering pandemic-fuelled e-commerce purchases to residential addresses.

Shares in the Memphis-based company, which have almost doubled in value over that last 12 months, fell 3.4 per cent to US$282.55 in after-market trading.

Fiscal second quarter adjusted net income at FedEx jumped to US$1.30 billion, or US$4.83 per share, from US$660 million, or US$2.51 per share, a year earlier. Revenue grew 19 per cent to US$20.6 billion.

Analysts expected earnings of US$4.01 per share and revenue of US$19.5 billion, according to Refinitiv data.

FedEx and rival United Parcel Service have added a variety of surcharges and raised prices to shelter profits as they grapple with unprecedented volumes from the pandemic, and lately, the traditional holiday shipping peak.

"While the overall environment remains uncertain, we expect earnings growth in the second half of fiscal 2021 driven by the anticipated heightened demand for our services," FedEx CFO Michael Len said in a statement