Next-year outlook bridges Wall Street view
By Christopher Hinton, MarketWatch
NEW YORK (MarketWatch) -- FedEx Corp. said Wednesday that higher shipping prices and volumes helped lift its fiscal fourth-quarter earnings by 33% on Wednesday and returned its freight business to profitability.
Results topped analysts mean estimates and gave a boost to the Memphis-based company’s FDX +2.44% stock, up 2.2% at last check to $91.10 a share. In the last year, shares have climbed roughly 20% as trade picked up following the recession.
“During fiscal 2011, an improved economy, strong customer demand and decisive actions to grow our business led to increased volumes and yields across all transportation segments,” said Frederick Smith, FedEx chairman and chief executive officer.
“With this positive momentum, moderate economic growth and subsiding cost headwinds, FedEx is well positioned to deliver strong earnings growth in fiscal 2012,” Smith said in a statement.
For fiscal 2012, FedEx management forecast earnings in the range of $6.35 to $6.85 a share, versus the Wall Street consensus of $6.42 a share, as provided by FactSet Research.
The forecast assumes the current market outlook for fuel prices and moderate growth in the global economy.
For the recent period, FedEx said it earned $558 million, or $1.75 a share, up from $419 million, or $1.33 a share, in the year-ago period. Total revenue rose 12% to $10.55 billion.
Analysts surveyed by FactSet were looking for earnings of $1.73 a share, on average, with sales of $10.41 billion.
Revenue and profits increased for all segments, with particularly robust operating income growth in the company’s ground segment - up 31% from a year ago to $417 million.
FedEx Freight returned to profitability during the quarter with an operating income of $42 million, compared to a loss of $36 million a year ago, thanks primarily to improved pricing in the segment’s less-than-truckload (LTL) operations.
“Strong yield growth and efficiencies resulting from the Jan. 30, 2011 combination of the FedEx Freight and FedEx National LTL operations are expected to drive a substantial improvement in operating results in fiscal 2012,” the company said.
Christopher Hinton is a reporter for MarketWatch based in New York.
