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FedEx Profit Beats Estimates

Over the past few months, economists and markets saw conflictual tendencies, as companies posted their revenues for the quarter. When a company beats estimates in today’s difficult economy it only pays to take a peek at the origin of its success. FedEx is the most recent company to post profit that beats estimates.

FedEx Chief Executive Officer Frederick Smith said the company has delivered a $497 million net profit for the fiscal second quarter, up from $283 million last year. Profit for the three months through November rose to $497 million, or $1.57 a share, from $283 million, or 89 cents, a year earlier. Analysts with Bloomberg were looking at an average of $1.53.

Adjusted earnings for the quarter ending Feb. 29 will be $1.25 to $1.45 a share, the company said. And Sales climbed 10 percent to $10.6 billion, in line with estimates. The company confirmed its forecast of $6.25 to $6.75 per diluted share for fiscal 2012.

According to a poll by Thomson Reuters, analysts were expecting revenue to rise to $10.61 billion, and it rose 10 percent to $10.59 billion.

Frederick Smith explains how they managed the good results: “Our improved performance was largely a result of effective yield management programs and strong demand for FedEx Home Delivery and FedEx SmartPost services”. Due to the “healthy growth in online shopping this holiday season, demand is increasing for these residential delivery services”, said Smith.

News regarding the company’s profit boosted shares three percent in pre-market trading at $79.90.

To sustain growth and respond to consumer demand FedEx has ordered 27 Boeing Co. 767 jet freighters, that will replace some of the older planes. The company explained the 767s will be about 30 percent more fuel-efficient than the MD10 jets they’re replacing, some of which are more than 40 years old. Three of the jets will be delivered in fiscal 2014 and six a year from 2015 through 2018. The jets have a catalog price of $175.4 million, though carriers typically negotiate discounts.
The company is delaying the delivery of 11 77F aircraft to reduce capital spending and adjust to the slowing volumes out of Asia.

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Ronald Silva is one of our newest publishers.He currently lives in Toronto (Canada) with his family.Ronald covers the music and sports sections of DailyGossip.org. Over the past few years, Ronald has participated in various journalistic projects including some of which he started when he worked for a local newspaper in Toronto. Contact him at Ronald.Silva@dailygossip.org.

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