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• FedEx expects full-year earnings, excluding items, of $20.50 to $21.50 per share
• Shares of the company rose 5% to $250.50 in after-hours trading
U.S. delivery company FedEx Corp on Thursday reinstated its original fiscal 2022 forecast, despite labor shortages ahead of the holiday season.
Shares of the company rose 5% to $250.50 in after-hours trading.
FedEx Chief Operating Officer Raj Subramaniam said labor shortage should come down in the future. "We are essentially staffed up for peak," said Subramaniam.
Holiday Season
With the festive season round the corner, the number of packages to be handled by these carriers often doubles.
Unlike last year, though, concerns of delayed deliveries have faded as retailers have expanded pick-up and gig-delivery options. Also, most of the stores remain open even after the spread of Omicron variant.
FedEx expects full-year earnings, excluding items, of $20.50 to $21.50 per share, as earlier. The company lowered its earnings forecast in September to $19.75 to $21.00 per share.
For the quarter ended November 30, adjusted net income was $1.3 billion, or $4.83 per share. In the second quarter, costs increased by $470 million year-over-year due to labor shortages which resulted in inefficiencies, higher wages and higher transportation costs.
In the quarter, revenue increased 14% to $23.5 billion for due high demand of e-commerce deliveries.
Several experts have pointed out poor performance of FedEx regarding on-time deliveries, compared to UPS and U.S. Postal Service.
According to ShipMatrix, during Nov 14 to Dec 4, on-time performance of FedEx was 85.7% while 96.4% and 95.1% for UPS and U.S. Postal Service.
Picture Credits: Reuters