FedEx Gains on Beating Q2 Estimates, Restoring Higher Guidance -Breaking
By Dhirendra Tripathi
Investing.com – FedEx stock (NYSE:) jumped 6% in Friday’s premarket trading as higher shipping rates took the company’s fiscal second-quarter numbers well past analysts’ estimates.
A top-up of $5 billion in share buybacks and the company’s restoration of earlier, higher, revenue guidance were also adding to the gains in the stock.
FedEx claimed that the revenue per shipment rose in the second quarter. This was despite challenges such as a shortage of labor.
The overall increase in costs of fuel and labor shortages accounted for $470million in annual expenditures in November. This figure is based on the period from October to November. The adjusted operating margins fell by 0.3% to 7.1%. The total revenue increased 14% to $23.47Billion while net profit decreased 15% to $1B.
According to the company, the buyback will include a $1.5 billion accelerated exercise which will be complete by May end.
FedEx expects full year earnings per share at $21 (excluding certain items), as it first predicted in June. FedEx had decreased that range from $19.75 to $21 in its latest quarterly update.
FedEx Express Express, which is the largest company unit, saw sales rise by 12% due to higher volumes and yields.
Ground unit sales, usually the courier’s fastest-growing and most profitable, rose 13%, helped by a 9% increase in package prices.
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