Package delivery company FedEx Corp on December 16 reported a better-than-expected quarterly net profit, saying higher margins, cost-cutting and a lower effective tax rate offset weak industrial production and global trade.
The news sent FedEx stock up nearly 5 percent in after-market trading.
Often seen as a bellwether of US economic activity, Memphis, Tennessee-based FedEx reiterated its fiscal 2016 earnings forecast between $10.40 and $10.90 per share.
The company reported adjusted net income for its fiscal second quarter ended November 30 of $729 million, or $2.58 per share, up 17 percent from $622 million, or $2.16 per share, a year earlier.
Analysts had on average expected earnings for the fiscal second quarter of $2.51 a share.
FedEx said its adjusted earnings per share reflected one-off expenses of 9 cents a share related to settling litigation over its use of independent contractors as drivers at FedEx Ground and 4 cents related to its pending acquisition of Dutch package deliver company TNT Express NV.
FedEx "posted solid earnings despite continued weakness in industrial production and global trade, and we are making impressive progress toward our goals to increase margins, earnings per share, cash flows, and returns on invested capital," Chief Executive Frederick Smith said in a statement.
Revenue for the quarter totalled $12.5 billion, up from $11.9 billion a year earlier.
The company said revenue at its more lucrative international segment fell 6 percent to $6.59 billion from $7.02 billion, which it said stemmed in part from the strong US dollar.
The company's Ground network saw revenue jump 32 percent thanks to the inclusion of an acquisition from last year but also reflecting higher package volumes and higher prices charged to customers.
Smith said a record number of holiday packages, driven by the "steady rise" of ecommerce, was currently working its way through the company's network.
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