FedEx says express shipments drove 1Q profit up 40%

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FedEx Corp. announced Thursday, Sept. 21, that its first-quarter profit rose 40 percent, driven by strong demand for ground and international express shipments. For the quarter ended Aug. 31, the company reported net income of $475 million, versus a prior-year profit of $339 million. Revenue rose 11 percent to $8.54 billion from $7.71 billion in the year-earlier period.

Total combined average daily package volume at FedEx Express and FedEx Ground increased 5 percent over the year-earlier period. “We remain confident in our ability to achieve solid profitable growth by taking advantage of strong international trade trends, increased demand for fast-cycle logistics and the expansion of online purchasing,” says Frederick W. Smith, chairman, president and chief executive officer of Memphis, Tenn.-based FedEx. “The global economy is growing at a healthy pace, with the U.S. economy growing at a moderate, sustainable rate.”

FedEx also announced that a new contract it has tentatively struck with its pilots union will reduce full-year profit. The company’s FedEx Express unit and the Air Line Pilots Association reached a tentative deal on a new labor contract in August, and the proposed contract is pending a vote scheduled to occur in the current quarter. If ratified, the four-year contract would become amendable in 2010, the company says.