FedEx Corp. says the global economy will continue to see moderate growth as fuel and other costs subside.
The world's second-largest package delivery company said Wednesday it overcame lofty diesel and jet fuel bills to post a 33 percent increase in earnings for its fiscal fourth quarter. FedEx benefited from stronger demand and levied higher fuel surcharges on its customers.
"FedEx is well positioned to deliver strong earnings growth in fiscal 2012," said Chairman Frederick W. Smith in a prepared statement, citing momentum from the fourth quarter, moderate economic growth and "subsiding cost headwinds."
The Memphis, Tenn. company is considered a bellwether of global economic health among analysts and economists because it ships a wide variety of goods. Its business reflects the ups and downs of business and consumer spending.
In the fourth quarter, FedEx earned $558 million, or $1.75 per share. That compares with $419 million, or $1.33 per share, in the same period last year. Revenue increased 12 percent to $10.55 billion.
Analysts had expected earnings of $1.73 per share on revenue of $10.4 billion, according to FactSet.
For the full year, FedEx earned $1.45 billion, or $4.57 per share, compared with $1.18 billion, or $3.76 per share, for fiscal 2010. Annual revenue grew 13 percent to $39.3 billion.
The company said it expects to earn between $1.40 and $1.60 per share in the first quarter and between $6.35 and $6.85 per share in its 2012 fiscal year. Wall Street was looking for quarterly earnings of $1.42 per share and annual earnings of $6.42 per share.
FedEx plans to plow another $4.2 billion into its operations in 2012. Capital spending will go towards new aircraft as well as investments in company facilities, vehicles and technological support services.
FedEx said higher fuel surcharges helped increase revenue and offset higher diesel and jet fuel costs in the three months ended May 31. FedEx Express increased revenue 13 percent, FedEx Ground boosted revenue 15 percent and FedEx Freight increased revenue 6 percent compared with the same quarter last year and returned to profitability.
Shares increased $1.99, more than 2 percent, to $91.12 in premarket trading.
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