FedEx Corporation (NYSE: FDX) rode the increase in online shopping to beat expectations from Wall Street for the holiday season, even profit down 19% because of legal bills and acquisition costs.
The company reported Wednesday that peak-season demand was better than expected. FedEx raised its profit guidance for its current fiscal year of 2016 and stock price jumped up 10.44% to $159.33 during Thursday morning trading.
“Our strong financial performance was driven by increasing demand for our broad portfolio of FedEx business solutions which helped increase revenue and adjusted profit for the corporation,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “We sincerely appreciate the peak season efforts of our FedEx team members who delivered great service despite the challenges of stronger-than-expected shipping demand, driven by the growth in e-commerce.”
FedEx announced Wednesday diluted earnings per share of $2.51 for the third quarter which increased approximately 24% compared with the same quarter last year. Revenue rose almost 8.5% to $12.7 billion from last year $11.7 billion. Net income was $692 million which represented 18% increase compared with last year $586 million.
The company outlook for next quarter that diluted earnings per share to range between $10.70 and $10.90, compared to the previous expectation of $10.40 to $10.90 diluted earnings per share. The capital spending forecast for the whole fiscal year of 2016 is $4.8 billion.
“We now expect our fiscal 2016 adjusted earnings to be up 20% to 22% over last year, as we continue to benefit from our execution of the profit improvement program,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Our positive financial momentum should continue into our upcoming fiscal 2017, where we expect solid growth in earnings and cash flow.”