This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

FedEx Beats Estimates as Net Income Rises 7%

MEMPHIS (TheStreet) -- FedEx (FDX) beat Wall Street estimates as net income rose 7%, driven by growth in each of the company's transportation segment.

In pre-market trading about an hour before the opening bell, FedEx shares had gained $3.32 or 3% to $114.

The overnight package shipper reported earnings of $489 million, or $1.53 a share, for the fiscal first quarter ended Aug. 31. Analysts surveyed by Thomson Reuters had estimated $1.50. Revenue rose 2% to $11 billion, in line with estimates.

In the same quarter a year earlier, FedEx earned $459 million, or $1.45 a share.

"Growth in overall demand for our broad global portfolio of solutions drove our improved first quarter results," said CEO Fred Smith, in a prepared statement. "FedEx Express remains focused on reducing costs while facing challenging global economic conditions. Meanwhile, FedEx Ground continues to generate strong profitability on growing customer demand for its services."

Looking ahead, FedEx reaffirmed its forecast of full-year earnings per share growth of 7% to 13%, assuming the market outlook for fuel prices, U.S. GDP growth of 2.1% and world GDP growth of 2.6%. "We remain confident in our full year earnings outlook despite tepid global economic growth," said Chief Financial Officer Alan Graf. The company will increase shipping rates by an average of 3.9% for U.S. services, effective Jan. 6, 2014.

During the quarter operating income rose 7% to $742 million while operating margin was 7.2%, up from 6.9% a year earlier. Trends were positive despite "significant headwinds from the net year-over-year impact from the timing lag that exists between when fuel prices change and (when) indexed fuel surcharges automatically adjust, as well as one fewer operating day," the company said.

At FedEx Express, operating income rose 14% to $236 million, while revenue declined marginally $6.61 billion due to lower fuel surcharges and one fewer operating day. At FedEx Ground, operating income rose 5% to $468 million while revenue rose 11% to $2.73 billion due to increased rates and higher residential surcharge revenue, partially offset by lower fuel surcharges. At FedEx Freight, operating income rose 1% to $91 million, while revenue rose 2% to $1.42 billion.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs