FedEx boosts forecast, shares up 6%

By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- Delivery giant FedEx Corp. boosted its earnings forecast for the current quarter and full year Monday. The company cited increased demand for its express and ground services as the global economy continues to recover.

FedEx said it expects to earn between $1.05 and $1.25 per share for the first quarter ending Aug. 31, up from its previous guidance of 85 cents to $1.05 per share. Analysts surveyed by Thomson Reuters were expecting a profit of $1.01 per share.

For the full year, the Memphis, Tenn.-based company said it should rake in between $4.60 and $5.20 per share, above earlier targets of $4.40 to $5.00 per share. The latest projection is roughly in line with analyst expectations.

Shares of FedEx (FDX, Fortune 500) surged to close 5.6% higher on the news. The stock of rival UPS (UPS, Fortune 500) also rose, climbing 1.9%.

FedEx said its new forecast reflects the current outlook for fuel prices and a continued recovery in the worldwide economy.

"Our revenue and earnings growth are exceeding original expectations, primarily due to better-than-expected growth in FedEx Express and FedEx Ground volumes," said Alan Graf, FedEx chief financial officer.

Graf said there has been especially strong demand for its higher margin international priority package and freight services. Volumes are expected to surge 20% during the current quarter.

The company said it included the cost of restoring the company match for 401(k) plans beginning in 2011 in the earnings outlook.

FedEx's first quarter results will be released Sept. 16.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,086.63 -26.91 -0.16%
Nasdaq 4,473.70 17.68 0.40%
S&P 500 1,987.01 3.48 0.18%
Treasuries 2.46 -0.00 -0.08%
Data as of 7:19am ET
Company Price Change % Change
Apple Inc 97.19 2.47 2.61%
Facebook Inc 71.29 2.02 2.92%
Microsoft Corp 44.87 0.04 0.09%
EMC Corp 28.75 0.23 0.81%
Bank of America Corp... 15.52 0.00 0.00%
Data as of Jul 23

Sections

McDonald's is standing by a troubled meat supplier, even after allegations the company was selling tainted and expired meat. More

With cost-cutting at the U.S. Postal Service more letter carriers are working later and later to deliver your mail. About 38% of mail is delivered after 5 p.m. in cities nationwide. And areas like Atlanta, Washington and South Florida, it's 70%. More

Like many of its Silicon Valley peers, Twitter workers are mostly male and white according to a diversity report released by the company Wednesday. More

As 65,000 IDF reservists are tapped to serve in Gaza, Israeli's tech community tries to maintain business as usual, amidst bombs, sirens and employees called to war. More

Chinese buyers are now the biggest international players in the U.S. housing market and some states are seeing billions of dollars in real estate deals as a result. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.