LOS ANGELES (Reuters) – Shares of FedEx Corp (FDX.N) jumped 8.5% in extended trading on Tuesday after a surge in pandemic-fueled home deliveries helped the U.S. package carrier post better-than-expected quarterly profit and revenue.
Adjusted profit at Memphis-based FedEx fell by almost 50% to $663 million, or $2.53 per share, for the quarter ended May 31. Revenue slipped to $17.4 billion from $17.8 billion a year earlier.
Analysts, on average, expected a profit of $1.52 per share on revenue of $16.4 billion, according to Refinitiv IBES data.
FedEx said the novel coronavirus pandemic hit virtually all of the company’s revenue and expense line items. Executives declined to provide an earnings forecast for fiscal 2020, citing the uncertain timing and pace of an economic recovery.
FedEx is grappling with a flood of coronavirus-related e-commerce shipments as it rebuilds from its split with Amazon.com Inc (AMZN.O), a major customer, and the costly integration of TNT Express in Europe.
Business closures and the profound shift to online shopping are squeezing profits at FedEx and rival United Parcel Service Inc (UPS.N). Residential e-commerce deliveries are less lucrative than business deliveries because they involve far-flung addresses and fewer packages per stop.
FedEx executives said they are beginning to see a recovery in business-to-business shipments as they attack residential delivery costs.
FedEx Ground, which handles more e-commerce home deliveries, reported a 20% revenue increase for the quarter and a 17% drop in operating income.
Revenue at FedEx Express, which skews toward commercial deliveries, fell 10% and operating income dropped 56%.
Total domestic package volume fell 9% for the quarter.
FedEx shares, which hit a record high of almost $250 in October 2017, were up $11.90 at $152.00 in after-hours trading on Tuesday.
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