FedEx raises its full-year profit forecast as economy rebounds
FEDEX raised its full-year outlook yesterday due to a surge in the number of packages flowing through its air and ground networks, boosting its shares and the broader market.
For the first quarter ending on 31 August FedEx raised its earnings per share forecast to a range of $1.05 (68p) to $1.25, up from a prior view of 85 cents to $1.05 and ahead of analysts’ estimates of $1.01.
Demand for high tech electronics and their components out of Asia is driving an estimated 20 per cent first-quarter volume increase in the company’s premium “International Priority” service, which ships goods from country to country as fast as overnight, said spokesman Jess Bunn. Last quarter, International Priority volume rose 23 per cent.
With the higher forecast for its fiscal first quarter, FedEx now sees full-year earnings of $4.60 per share to $5.20 per share compared with analysts’ expectations of $4.98. Previously it had projected $4.40 to $5.00.
Both FedEx and larger rival United Parcel Service, the world’s largest package delivery company, are considered proxies for global economic health because their businesses expand during boom times and shrink in recessions.