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. Follow @tedreednc -- 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
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV