MEMPHIS: US delivery firm FedEx Corp. reported a bigger-than-expected quarterly profit on Tuesday, after price hikes, lower fuel costs and efficiency gains countered negative impacts associated with a pandemic-fuelled surge in e-commerce shipments.A
Average daily package volume for FedEx Ground, which handles e-commerce deliveries for retailers like Walmart, jumped 31 per cent to 11.6 million during the fiscal first quarter ended 31 August.
Revenue per package rose 2 per cent to $9.33 during the quarter, which also included one additional business day.
Covid-19 upended operations at FedEx and rival United Parcel Service.
Lucrative deliveries to businesses dried up and higher-cost residential deliveries boomed as workers sheltered at home and placed online orders for everything from office furniture and exercise equipment to snacks and pet food.
Rising volumes and investments
Home deliveries traditionally have been more expensive because they involved fewer packages and far-flung stops. Rising volumes and investments in things like automated sorting centres and route optimisation are bringing those costs down.
FedEx spent $565 million on fuel across the company during the quarter, 35 per cent less than a year earlier.
FedEx did not provide an earnings forecast for fiscal 2021, citing continued uncertainty, but said it expects annual capital spending of $5.1 billion, above analysts’ average estimate of $4.96 billion.
Fiscal first quarter adjusted net income at FedEx jumped 60 per cent to $1.28 billion, or $4.87 per share. Revenue rose 13.5 per cent to $19.3 billion.