FedEx Corp, the world's largest air-express carrier, on Wednesday posted a higher quarterly profit on strong US and global economic growth and price increases, and raised its full-year profit forecast.
The Memphis-based company, often perceived as a barometer for the health of the US economy because it ships a broad range of products from raw materials to finished goods, said it enjoyed a strong holiday shipping season and benefited from lower-than-expected fuel costs.
It also cited better productivity, a lower tax rate, and said it deferred advertising and promotion costs to the fourth quarter, which ends in May.
Net income rose to $428 million, or $1.38 a share, in the fiscal third quarter ended February 28, compared with $317 million, or $1.03 a share, in the year-earlier quarter.
Analysts had expected $1.30 according to Reuters Estimates. Sales rose 9 percent, to $8.0 billion, slightly below forecasts of $8.03 billion in revenue.
FedEx's Express segment, which usually makes up some two-thirds of its total revenue, saw sales increase 9 percent, to $5.34 billion, and operating margins jumped to 8.4 percent from 6.9 percent a year earlier. Its FedEx International Priority revenue rose 12 percent on fuel surcharges.
Looking ahead, FedEx said it expected fourth-quarter profit in a range of $1.65 to $1.80 a share, compared with Wall Street consensus estimates of $1.73. The company estimated full-year profit will be between $5.66 and $5.81 per share, up from its earlier forecast of $5.45 to $5.70. That includes a 15 cent lease-accounting charge, the company said.