FedEx Earnings Jump as Package Volume Bounces

Citing strength in its ground and express shipment businesses, FedEx ( FDX) posted a 19% jump in fourth-quarter profit Tuesday, beating analysts' estimates by 2 cents.

The company also issued first-quarter and full-year 2004 earnings forecasts.

The Memphis, Tenn.-based company earned $280 million, or 92 cents a share, in the quarter ended May 31, compared with $236 million, or 78 cents a share, in the previous-year quarter. Analysts were expecting 90 cents a share.

Revenue was $5.83 billion, up 8% from last year. The company said total average daily package volume rose 5% year over year, thanks to strong ground and international express shipments. FedEx Express shipment revenue rose 6% while operating income jumped 26% to $297 million. The company said a higher fuel surcharge provided a $50 million net benefit to operating income.

Meanwhile, FedEx Ground had an 18% rise in revenue to $880 million and operating income was up 17% to $150 million. The unit's average daily package volume grew 13%, the company said, of which about 40% was attributable to its FedEx Home Delivery unit.

After an increase in pension and health care costs, the company expects first-quarter earnings to be 52 cents to 60 cents a share, excluding charges. Analysts forecast 57 cents a share. The company earned 52 cents a share in the prior-year quarter.

For 2004, FedEx expects to earn $3 to $3.15 a share, excluding charges. The company will record charges related to its voluntary early retirement and severance programs during the year. FedEx earned $2.74 a share in 2003.

Shares of the company closed at $61.99 Monday on the New York Stock Exchange.

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