U.S. delivery firm FedEx Corp on Thursday said quarterly profit almost doubled after rate hikes and spiking volume helped lower the cost of delivering pandemic-fueled e-commerce purchases to residential addresses.
Shares in the Memphis-based company, which have almost doubled in value over that last 12 months, reversed 3.5% to $282.32 in after-market trading as executives warned that the new wave of COVID-19 cases increases economic uncertainty.
Fiscal second quarter adjusted net income at FedEx jumped to $1.30 billion, or $4.83 per share, from $660 million, or $2.51 per share, a year earlier. Revenue grew 19% to $20.6 billion.
Analysts expected earnings of $4.01 per share and revenue of $19.5 billion, according to Refinitiv data.
FedEx and rival United Parcel Service have added a variety of surcharges and raised prices to shelter profits as they grapple with unprecedented volumes from the pandemic, and lately, the traditional holiday shipping peak.
Average daily package volume for FedEx Ground, which counts Walmart among its marquee e-commerce customers, jumped 29% to 12.3 million during the quarter ended Nov. 30. Revenue per package increased 7% to $9.42.
“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,” FedEx CFO Michael Lenz said in a statement.
FedEx has been managing a flood of e-commerce volume by incentivizing customers to move packages on the weekend, when its network is not as busy.
The company and its retail customers, however, were not successful in their campaign to convince shoppers to make the bulk of holiday purchases before the traditional Black Friday and Cyber Monday shopping kickoff.
“We really were hoping to change shopping behavior and we really didn’t see that,” said FedEx marketing chief Brie Carere.