{"id":443724,"date":"2010-03-18T11:28:34","date_gmt":"2010-03-18T15:28:34","guid":{"rendered":"http:\/\/www.businessinsider.com\/fedex-sees-a-broadening-recovery-hikes-guidance-2010-3"},"modified":"2010-03-18T11:28:34","modified_gmt":"2010-03-18T15:28:34","slug":"fedex-yep-were-back","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/443724","title":{"rendered":"Fedex: Yep, We’re Back!"},"content":{"rendered":"

\"Fedex\"<\/p>\n

Economic bellwether Fedex reported earnings ahead of analyst expectations for their third fiscal quarter ending February 28th, raised their full year forward earnings guidance, and then spoke of a broadening recovery on their analyst conference call.<\/p>\n

This comes after they had already become confident enough to increase rates on North American Less-than-truckload (LTL) shipments starting from the beginning of February:<\/p>\n

—<\/p>\n

NEW YORK (AP) — FedEx says the global economic recovery is broadening, as Asia continues to see strong growth and the U.S. economy gains steam.<\/p>\n

Fred Smith, CEO of the world’s second-largest package delivery company, said U.S. growth is being led by a strengthening manufacturing sector. FedEx is predicting gross domestic product growth of about 3 percent for 2010, in line with the expectations of economists.<\/p>\n

Still, Smith warned in a conference call Thursday that the housing market “could remain a problem.”<\/p>\n

The largely positive comments came after FedEx said that fiscal third-quarter profit more than doubled from a year earlier. It was the first year-over-year profit increase for the Memphis, Tenn., shipping company in five quarters.<\/p>\n

FedEx also raised the forecast for full-year earnings — bringing it in line with Wall Street’s projections — on expectations of “a continued modest recovery in the global economy.”<\/p>\n

The company, considered an economic bellwether because of the variety of products it ships, said Thursday it earned $239 million, or 76 cents per share, compared with $97 million, or 31 cents per share a year earlier.<\/p>\n

Revenue rose 7 percent to $8.70 billion. The results exceeded Wall Street expectations for earnings of 72 cents per share and revenue of $8.37 billion.<\/p>\n

The company said results were boosted by higher shipping volume, particularly at its international express and Ground units.<\/p>\n

Average daily volume in International Priority packages grew 18 percent, led by exports from Asia.<\/p>\n

Average daily package volume at FedEx Ground grew 5 percent, mostly due to businesses shipping more packages to other businesses. Better volume is a good sign for FedEx — and in turn, the economy — because it means consumers and businesses are shipping more goods.<\/p>\n

FedEx made more money per package mostly due to higher package weight — another positive economic sign. Cost cuts also boosted results.<\/p>\n

But the results also show that large transportation companies like FedEx continue to battle higher fuel costs. In addition, a loss at the company’s freight unit and partial reinstatement of some employee benefits the company had taken away during the recession damped results.<\/p>\n

For the fourth-quarter, FedEx expects earnings per share of $1.17 to $1.37, compared with analysts’ prediction of $1.26 per share. FedEx said reinstatement of more employee compensation programs will hurt earnings in that period as well as in the next fiscal year, which begins in June.<\/p>\n

UPS, the world’s largest shipping company, said last month that fourth-quarter earnings nearly tripled. Still, UPS said its freight business — which transports larger products like appliances and cars — continued to lose money.<\/p>\n

FedEx shares lost $2.52, or 2.8 percent, to $87.28 in morning trading. But shares climbed more than $3 in the week before the earnings report.<\/p>\n

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