FedEx Int’l Priority, US Residential Volumes Fuel Strong Q2 Results

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FedEx reported on Friday (Dec. 18) as part of its Q2 fiscal 2021 earnings that higher volumes in international priority and U.S. domestic residential package services, in addition to pricing initiatives throughout all transportation segments, fueled increased operating results.

The company said that those factors were offset, in part, by expenses to help with formidable demand and to grow services, pandemic-related costs and “variable compensation expense.”

For Q2 fiscal 2021, FedEx reported $4.83 in diluted earnings per share (EPS) on $20.6 billion in revenue on an adjusted (non-GAAP) basis. Those results exceeded the $2.51 in diluted EPS on $17.3 billion in adjusted revenue reported for Q2 fiscal 2020. The company also handily exceeded analyst estimates of $3.18 in earnings on $18.88 billion in revenue.

“Our strong revenue and earnings growth during the quarter is a reflection of their continued hard work and commitment to our customers,” FedEx Chairman and CEO Frederick W. Smith said in an earnings release. “These results demonstrate the unparalleled strength of our global express network, the breadth of our eCommerce capabilities and the dedication of our people.”

Management said the company is not offering a fiscal 2021 earnings forecast, and noted that the capital spending outlook for the year stays at $5.1 billion.

“While the overall environment remains uncertain, we expect earnings growth in the second half of fiscal 2021, driven by the anticipated heightened demand for our services as we continue to execute on our strategic priorities,” FedEx Executive Vice President and Chief Financial Officer Michael C. Lenz said in the release.

The earnings report comes shortly after FedEx took a significant step in bolstering its eCommerce capabilities by unveiling a deal to buy ShopRunner for an undisclosed price.

ShopRunner, which is based in Illinois, links millions of consumers to more than 100 well-known brands, offering a smooth shopping experience throughout merchants. Customers get complimentary two-day shipping and returns as well as easy checkout and member-exclusive promotions.

“We are committed to growing the ShopRunner platform and combining it with our global digital and logistics intelligence to create new possibilities in eCommerce,” FedEx President and Chief Operating Officer Raj Subramaniam said in a press release unveiling the deal.

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