Shares of FedEx (FDX) – Get Report jumped after hours on Tuesday after the package-delivery service reported fiscal-first-quarter results that were ahead of analyst expectations.
For the quarter ended Aug. 31 the Memphis company reported net income of $4.72 a share, up 66% from $2.84 a share in the year-earlier quarter.
Adjusted net income climbed to $4.87 a share from $3.05.
First-quarter revenue of $19.3 billion was 14% up from $17 billion a year earlier.
Wall Street analysts surveyed by FactSet were expecting GAAP earnings of $2.54 a share, or an adjusted $2.70, on revenue of $17.55 billion.
“Our earnings growth underscores the importance of our business initiatives and investments over the last several years, and, in many ways, the world has accelerated to meet our strategies,” Chief Executive Frederick W. Smith said in a statement.
The company said the results stemmed from volume growth in FedEx International Priority and U.S. domestic residential package services.
FedEx also said it improved yield in its FedEx Ground and FedEx Freight operations during the quarter.
Operating-profit margin for the quarter widened to 8.2% from 5.7% a year earlier.
FedEx did not provide an earnings forecast for fiscal 2021. But it did raise its capital-spending forecast for the year by $200 million to $5.1 billion, driven by additional capacity initiatives.
On Monday, the company said that its FedEx Express, FedEx Ground and FedEx Freight subsidiaries would increase shipping rates starting Jan. 4.
Last month FedEx said that between Nov. 2 and Jan. 17, regular shipments to residences will face a surcharge of $1 to $5.
United Parcel Service (UPS) – Get Report and the U.S. Postal Service also have imposed holiday fees. This is the first time FedEx has done so since 2016.
“We anticipate residential volume to continue to surge into the new year. To continue providing our customers with the best possible service during this challenging time, we are implementing … surcharges and fees,” the company said.
FedEx shares at last check were 9.9% higher at $260. They closed Tuesday’s regular session little changed at $236.67.