FedEx Corp. said that Q1 earnings rose by 24% as it managed to finalize a record buyback program, registered growth in deliveries across segments and lowered pension expense.
“All three of our transportation segments drove higher revenues and improved profitability year over year,” Chief Financial Officer Alan Graf said in the statement, which was cited by Bloomberg. “Our profit improvement programs are progressing as planned and we continue to expect strong earnings growth this year.”
Chief Executive Officer Graf also explained that the full benefit of the expense-reduction plan is to be felt next year. FedEx was not specific about the size of the benefits from lower pension spending.
According to the companys statement, FedEx Corp.s net income increased by 24% to $606 million in the three months ended August 31st, from $489 million a year earlier. Per-share earnings amounted to $2.10 including a 15-cent gain attributable to the stock buyback. This result surpassed analysts initial estimates of $1.96.
The company shared that its revenue over the period rose by 6% and reached $11.7 billion, topping analysts projections for $11.48 billion.
FedEx reaffirmed its earnings projections for the fiscal 2015 in the range of $8.50-$9 per share in light of accelerating US industrial production this year and global economy prospects in 2015. The package delivery company also revealed that it plans to add 50 000 jobs over the holiday-season, up by 10 000 from a year earlier.
Logan Purk, an analyst at Edward Jones, commented for Bloomberg: “It was solid across all the business lines. There was solid volume and pricing growth in Express, Ground, and Freight stood out a lot.”
The companys e-commerce segment helped push first-quarter growth in its ground segment, with revenue jumping by 8% to $2.96 billion. The biggest segment, express deliveries, registered a 4% increase in revenue to $6.86 billion as domestic package volume jumped, while the freight segment posted a 13% rise in revenue to $1.61 billion.
FedEx Corp. surged 3.73% by 14:53 GMT in New York to trade at $160.43 per share, marking a one-year change of +44.95%. The company is valued at $43.92 billion. According to CNN Money, the 21 analysts offering 12-month price forecasts for FedEx Corp. have a median target of $162.00, with a high estimate of $192.00 and a low estimate of $145.00. The median estimate represents a +4.75% increase from the previous close of $154.66.
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