FedEx nearly tripled its quarterly profit and saw its revenue bump up 23%, WSJ reports.
Why It Matters: Like UPS, FedEx has been fueled by surging e-commerce orders stemming from home shoppers in the Covid-19 pandemic. It’s a trend that experts expect to continue even as vaccines rollout and more businesses reopen. What’s interesting is that quarter could have been even stronger for FedEx after winter storms across the U.S. disrupted business and cost it $350 million in profit.
Numbers To Consider:
- FedEx package volume rose 25% in its ground unit for the latest quarter. The previous quarter saw a 29% rise. For FedEx’s Express business, volumes improved by 12.2% in the latest quarter.
- FedEx’s net income nearly tripled from the prior year to $892 million.
- Its revenue in the quarter hit $21.5 billion, a rise from $17.5 billion in the year prior.
The Outlook: Both FedEx and UPS have been raising prices to manage the pandemic-driven demand, which has seemingly paid off so far. FedEx, surprisingly, has kept pace with its key rival after breaking ties with Amazon and focusing on serving other companies such as Target and Walmart. And though the future is tied to e-commerce, FedEx has seen its B2B volume return to pre-pandemic levels.
- CEO Fred Smith: “We expect demand for our unmatched e-commerce and international express solutions to remain very high for the foreseeable future.”