LOS ANGELES: FedEx raised the lower end of its full-year profit forecast after a cost-cutting quarter when it poached customers from rivals UPS and Yellow.
FedEx shares jumped 5.7% to US$264.60 in extended trading after the Memphis-based company said it now expects adjusted fiscal 2024 earnings of US$17 to US$18.50 per share, increasing the low end of the range by 50 US cents from its prior forecast.
The global delivery firm reported fiscal first-quarter adjusted earnings of US$4.55 per share, blowing past Wall Street expectations of US$3.73 per share, according to LSEG data.
Tumultuous labour talks at direct competitor United Parcel Service and the bankruptcy of trucking firm Yellow created market share opportunities in the US transportation industry, FedEx chief executive officer Raj Subramaniam said on a conference call to discuss the results.
“We captured upside as a result of these one-time events,” he said.
Operating income in FedEx’s Ground division jumped 59% for the quarter ended Aug 31.
That unit benefited from UPS customers shifting packages to alternate carriers ahead of the Aug 1 expiration of its contract covering about 340,000 United Brotherhood of Teamsters-represented workers.
UPS executives last month said its customers shifted one million packages per day to other providers, resulting in about US$200mil of lost sales.
FedEx said it added about 400,000 to its average daily volume by the end of August. — Reuters