FedEx Corp's quarterly profit and outlook beat forecasts as higher shipping rates and tight cost controls more than offset a slowing economic recovery and high fuel prices. The company will be spending more on technology and on fuel efficient aircraft, helping to increase revenue per package. Its shares gained 2.5 percent on Wednesday.
"Our actions to improve yields continue to drive revenue and earnings growth across our transportation segments," said FedEx Chief Financial Officer Alan B. Graf. Net profit rose 33 percent to $558 million, or $1.75 per share in the quarter that ended May 31, from $419 million, or $1.33 per share a year ago.
FedEx forecast its fiscal 2012 profit rising to $6.35 to $6.85 per share - leaving room for oil price volatility, Graf said. FedEx said it plans to spend $4.2 billion in fiscal 2012, which includes the delivery of aircraft, payments toward future aircraft deliveries and investments in facilities, vehicles and technology.
Capital spending in fiscal 2011 was $3.4 billion, of which $2 billion was for aircraft and related equipment. Fourth-quarter revenue rose 12 percent to $10.55 billion from $9.43 billion a year ago, Memphis, Tennessee-based FedEx said on Wednesday. Wall Street analysts expected $10.4 billion in revenue, on average, according to Thomson Reuters I/B/E/S. Adjusted earnings were $4.90 per share in 2011, up from $3.76 a year ago and directly in line with the consensus forecast.
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