FedEx Boosts Outlook on International Demand

FedEx raised its projected earnings forecast for the current quarter on Monday, saying demand for international air express shipping is accelerating.

The carrier said it expects international package volume to grow more than 20 percent in the fiscal first quarter ending Aug. 31 while growth in domestic parcel services remains strong.

FedEx’s upbeat report follows a similar report from UPS, which reported strong earnings last week that included better than 20 percent growth in international package and freight services.

Both carriers have been gaining from resurgent exports out of Asia, and UPS said last week that tight ocean capacity was pushing some shippers to shift goods to more expensive air transport.

FedEx boosted its earnings projection for the fiscal quarter about 20 percent, saying it expects to report a profit between $1.05 and $1.25 a share. That would bring the company’s net profit in at around double last year’s fiscal first quarter, when FedEx earned $181 million.

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“Our revenue and earnings growth are exceeding original expectations, primarily due to better-than-anticipated growth in FedEx Express and FedEx Ground volumes,” said Alan B. Graf Jr., FedEx executive vice president and chief financial officer.

“Our package volume growth rates in our first quarter are continuing at a pace similar to our fourth quarter. Of particular benefit to our earnings is the continued strong demand for our higher-margin FedEx International Priority package and freight services, with IP package volumes expected to grow more than 20 percent again this quarter.”