Pandemic soars FedEx profit as delivery demand rises

U.S. delivery firm FedEx Corp on Thursday said that the pandemic-fueled e-commerce deliveries have increased the quarterly profit more than expected on higher prices during the holiday shipping season.

FedEx shares have more than doubled in price since last year when the pandemic made the government officials issue stay-at-home orders and shut businesses.

On Thursday, FedEx shares jumped 4% to $274 in extended trading after founder and Chief Executive Frederick Smith said he expected demand for e-commerce and international express services to “remain very high for the foreseeable future.”

According to Refinitiv data, fiscal third-quarter adjusted net income at the company based in Memphis soared 153% from a year earlier to $939 million, or $3.47 per share, beating analyst expectations of $3.23 per share.

Half-billion holiday package deliveries and COVID-19 vaccines shipments boosted quarter revenue ended Feb. 28 grew 23% to $21.5 billion.

FedEx and rival United Parcel Service hiked prices to gain profits after the pandemic brought in high-margin shipments between businesses and released a flood of deliveries of online orders, including bulky items like exercise bikes and sofas.

Marketing chief Brie Carere said e-commerce volume could soften for a short time as COVID-19 vaccinated shoppers return to stores in the near future.

“However, we are very confident that e-commerce as a percentage of retail has a long growth runway,” Carere said on a webcast.