The drawback is that unlike deliveries to businesses, shipments to consumers are spread out and more costly to deliver
Jan. 24, 2017, photo shows a FedEx truck in Miami. , photo: AP/Alan Diaz
21 of March 2017 18:59:32
DALLAS – Income and revenue rose during the peak holiday season at FedEx, but higher fuel costs helped keep profit below Wall Street's forecast.Holiday-season package volume was the heaviest ever, as the big package-delivery company continues to benefit from the growth in online shopping.The drawback is that unlike deliveries to businesses, shipments to consumers are spread out and more costly to deliver."If you just looked at overall sales, volumes and what they're getting per package, everything appears just fine," said Logan Purk, an analyst with Edward Jones. "It's the expense side that really offset the more-or-less solid fundamentals."Fuel costs in the company's FedEx Express business jumped 26 percent. Labor costs and rentals in the ground unit rose by double-digit amounts.The company is also trying to squeeze costs from Dutch delivery service TNT Express, which it bought last year. Chairman and CEO Fred Smith said that work is on schedule.[caption id="attachment_52607" align="aligncenter" width="1024"] July 26, 2015, a FedEx cargo airplane passes over Whittier, California, on its way to Los Angeles International Airport. Photo: AP/Nick Ut[/caption]FedEx Corp. said Tuesday that it earned $562 million in its fiscal third quarter, up 11 percent from a year earlier.Adjusted profit, which excludes costs related to the TNT acquisition, was $2.35 per share. That was well short of the $2.63 per share forecast by 11 analysts surveyed by Zacks Investment Research.Despite the miss on third-quarter earnings, FedEx continues to expect adjusted gross earnings for the fiscal year that ends in May of $11.85 to $12.35 per share, excluding costs related to TNT and other items. The company slightly lowered its full-year earnings forecast when TNT costs are included.Third-quarter revenue rose 19 percent to $15.0 billion, beating the $14.96 billion prediction by eight of the Zacks analysts.FedEx shares fell 43 cents to close at $191.84 before the results were released. In extended trading, they gained $2.91, or 1.5 percent, to $194.75.At Tuesday's close, the shares were up 3 percent this year, while the Standard & Poor's 500 index has climbed roughly 5 percent. The shares were up 17 percent in the last 12 months.