FedEx Q1 Profit Tops Street - Update

(RTTNews) - Package delivery giant FedEx Corp. (FDX), Tuesday reported an increase in profit for the first quarter that beat Street estimates, driven largely by strong revenue growth at FedEx Ground segment.

Memphis, Tennessee-based FedEx's first-quarter profit rose to $715 million or $2.65 per share from $692 million or $2.42 per share last year.

Adjusted earnings for the quarter were $2.90 per share. On average, 12 analysts polled by Thomson Reuters expected earnings of $2.78 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter rose 19 percent to $14.66 billion from $12.28 billion last year. Wall Street analysts had a consensus estimate of $13.81 billion.

Revenues for FedEx Express increased 1 percent to $6.66 billion, while FedEx Ground revenues increased 12 percent to $4.29 billion. Revenues for FedEx freight gained 4 percent to $1.66 billion, while FedEx services rose 1 percent to $395 million. TNT Express revenues were $1.80 billion.

"The integration of TNT Express is proceeding smoothly, and the level of team members' engagement is outstanding," said Frederick Smith, FedEx Corp. chairman, president and chief executive officer.

Being global transportation companies, the performance of shipping giants like FedEx and its rival United Parcel Service Inc. (UPS) are considered a strong barometer of overall consumer attitude and economy.

Looking forward to the full year 2017, adjusted earnings are projected to be $10.85 to $11.35 per share. Analysts currently estimate earnings of $11.99 per share for 2017.

Further, the company reiterated that FedEx Express will increase shipping rates by an average of 3.9 percent while FedEx Ground, FedEx Home Delivery and FedEx Freight will increase shipping rates by an average of 4.9 percent, effective January 2, 2017. Effective February 6, FedEx Express and FedEx Ground fuel surcharges will be adjusted on a weekly basis compared to the current monthly adjustment.

FDX closed Tuesday's trading at $162.65, up $1.39 or 0.86%, on the NYSE. The stock further gained $164.80, $2.15 or 1.32%, in the after-hours trade.