(Bloomberg)—FedEx Corp. reported fiscal fourth-quarter profit that beat expectations as an e-commerce boom boosts package deliveries and a manufacturing rebound drives growing demand in its freight-hauling business.
FedEx and other package-delivery companies have benefited from online shopping that surged 17% in 2017 as consumers increasingly opted for the convenience of having goods shipped directly to their homes. FedEx has invested heavily to keep up with the flood of demand by automating its operations, and those investments are beginning to pay off.
For its fiscal fourth quarter, FedEx reported adjusted earnings per share of $5.91. Analysts had predicted $5.69. Revenue was $17.3 billion, compared with analysts’ expectations of $17.2 billion.
The company forecast earnings of $17 to $17.60 a share for the fiscal year through next May, excluding pension adjustments and costs from the integration of TNT Express. The midpoint of the forecast is lower than the average $17.48 estimate of analysts surveyed by Bloomberg, but would represent a 13% gain on adjusted earnings for the year that ended May 31, Memphis, Tennessee-based FedEx said in a statement Tuesday.
Industrial freight also is rebounding, with the added bonus of rising cargo prices as trucking companies struggle to find enough drivers. Rates for less-than-truckload business, the category where FedEx competes, are expected to rise 13% this year, according to freight forecaster FTR Transportation Intelligence.