FedEx Corp. said Thursday its profit between December and February more than doubled as its ground and freight segments shipped more packages and charged higher prices.
In its fiscal third quarter, the world's second-largest package delivery company earned $521 million or $1.65 per share, compared with $231 million, or 73 cents per share, a year earlier.
The company had record holiday package shipments. FedEx gains when more people shop online for the holidays. It also benefits when gift recipients send back those ill-fitting sweaters or other unwanted presents.
Excluding one-time items, FedEx earned $1.55 per share compared with 81 cents per share a year ago. The results beat both analysts' and the company's own expectations.
Revenue rose 9 percent to $10.56 billion.
Sales at FedEx's express segment, its largest, rose 8 percent to $6.54 billion. That was mostly due to higher prices and heavier packages in the U.S. More consumers and businesses shipping heavier packages by air is a positive sign for the economy because it suggests they're comfortable paying more to get goods to their destination faster. Express revenue and average package weights plummeted in the recession as more people chose slower, less-expensive ways of shipping to save cash.
FedEx's ground segment results were boosted by its home delivery services, which include directing packages between residential customers and major retailers. The segment's revenue growth of 14 percent was the most at any of FedEx's businesses.
The company's freight segment reported a fourth straight profitable quarter. It ships bigger items like refrigerators and cars and was hardest hit during the recession. Its revenue rose 10 percent in the latest quarter.
Higher surcharges to cover the rising cost of fuel helped revenue in all business units.
Also Thursday, FedEx Corp. narrowed its forecast for the fiscal year ending in May. It now expects to earn $6.43 to $6.68 per share compared with between $6.25 and $6.75 per share previously. Analysts, on average, predict $6.39.
FedEx's stock is down about 1.5 percent to $94.41in trading before the opening bell.
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