Online shopping boosts FedEx's profit, shares hit life high
By Sweta Singh
(Reuters) - FedEx Corp (FDX.N: Quote) reported a better-than-expected quarterly profit as strong shipments of items ordered online boosted the ground business of world's No. 2 parcel delivery company.
FedEx said results in 2015 would also benefit from the restructuring of its express business, its largest by revenue, and it forecast full-year earnings that were better than many analysts and investors had expected.
The company's shares rose as much as 5.4 percent to a life high of $147.89 on the New York Stock Exchange on Wednesday.
"Forward earnings estimates across the Street (had) declined, as many were somewhat cautious on the quarter...," Cowen & Co analyst Helane Becker wrote in a note to clients.
The company, like larger rival United Parcel Service Inc (UPS.N: Quote), has been cutting costs to offset rising fuel prices.
The Memphis-based company is also restructuring its Express business, which has suffered as clients choose slower but cheaper delivery options, by revamping its routes and cutting capacity to Asia and other international markets.
"Ground and Freight are performing well and Express remains on track to achieve its profit improvement plan despite the fuel headwinds we've experienced," Chief Executive Fred Smith said on a post-earnings call.
Revenue from FedEx's ground business, which accounts for a quarter of the company's total revenue, rose 8 percent to $3.01 billion in the fourth quarter ended May 31. Continued...