FedEx gave a strongly upbeat view of economic expansion Thursday, announcing its net profit jumped 146 percent to $239 million in its latest fiscal quarter on dramatic growth in international air express business.
FedEx also said it will restore worker compensation programs that were cut during the depths of the downturn and will expand its capital spending about 11 percent this year as the company invests more in long-range international freighters operating in the fastest-growing part of its business.
FedEx’s overall revenue grew 7 percent in the three months ending Feb. 28, expanding across all three of its three major transportation lines, but the strongest demand came in international express, where the shipment count grew 18 percent, freight tonnage soared 62 percent and freight revenue grew 49 percent.
The company even expanded its overall revenue 1.2 percent in its fiscal third quarter compared to the previous quarter, suggesting demand was still accelerating in the usually light months of January and February.
The expansion in international business follows reports of a dramatic increase in air freight demand out of Asia in late 2009 as retail shippers rushed to restock depleted inventories during a late but unexpectedly robust peak season.
FedEx’s domestic express demand remained muted in the quarter, growing 1 percent over the same quarter a year ago.
But FedEx Ground saw revenue expand 7 percent in the quarter over last year and the parcel segment’s operating profit grew 32 percent.
The FedEx Freight less-than-truckload shipment count soared 26 percent in the quarter, pushing revenue up 14 percent over last year. But the trucking segment nearly doubled its operating loss in the quarter, as higher costs for purchased transportation pushed the operating loss up 81 percent, to $107 million.