FedEx profit beats Street, updating Boeing fleet

FedEx profit beats Street, updating Boeing fleet

(Reuters) - FedEx Corp reported a higher-than-expected quarterly distinction and is updating a swift with 27 new fuel-efficient Boeing aircraft to cut costs, pushing a shares adult as most as 5 percent.

The association also pronounced it is deferring smoothness of some Boeing freighter aircraft, adjusting for negligence volume out of Asia.

FedEx expects continued assuage mercantile growth, with trade flows staying volatile, executives told analysts on a discussion call after a association reported formula on Thursday.

The Boeing squeeze is a cost-effective pierce to hoop medium-haul domestic to intercontinental routes, Sterne Agee Managing Director Jeffrey Kauffman said. "This is a right thing, they're gauging behind their item growth," he said, referring to a deferral of smoothness of some aircraft.

FedEx delivered about 17 million packages on Dec 12, a busiest day in a 40-year story and twice a normal daily shipments, driven by online holiday orders.

The world's No. 2 package smoothness company reported mercantile second-quarter net distinction of $497 million, or $1.57 per share, adult from $283 million, or 89 cents per share, a year ago.

Analysts had been awaiting a distinction of $1.52 a share.

FedEx also endorsed a mercantile 2012 superintendence for $6.25 to $6.75 per share, after pleat it in Sep on temperate tellurian mercantile expansion and high fuel costs.

"Our softened opening was mostly a outcome of effective produce government programs and clever direct for FedEx Home Delivery and FedEx SmartPost services," FedEx Chief Executive Officer Frederick Smith said. "With a healthy expansion in online selling this holiday season, direct is augmenting for these residential smoothness services."

Revenue rose 10 percent to $10.59 billion. Analysts, on average, approaching income would arise to $10.61 billion, according to Thomson Reuters I/B/E/S.

The large volume of products changed by FedEx make a shipping trends a bellwether of consumer direct and a mercantile climate.

The value of packages that it handles in a trucks and planes any is homogeneous to about 4 percent of U.S. sum domestic product and 1.5 percent of tellurian GDP.

FedEx Express has sealed an agreement with Boeing Co to buy 27 new 767-300F aircraft, replacing some that are some-more than 40 years old.

The association pronounced a 767s will yield identical ability as a MD10s being retired, with about 30 percent some-more fuel potency and a smallest 20 percent rebate in section handling costs.

Three of a planes will arrive in mercantile 2014, afterwards 6 per year between 2015 to 2018.

FedEx Express is also loitering a smoothness of 11 777F aircraft, shortening collateral spending and adjusting to negligence volumes out of Asia.

"FedEx Express took movement during a entertain to adjust a network, quite in Asia, as new register destocking trends have impacted direct for a FedEx Express services," pronounced Alan Graf, FedEx arch financial officer.

FedEx share were adult 5 percent in early trade during $81.22. The shares are down about 13 percent this year, lagging a 5 percent dump in a Dow Jones travel normal <.djt>, though adult 27 percent from this year's lows in October.

(Reporting by Lynn Adler; Editing by Derek Caney, Dave Zimmerman)

News referensi http://news.yahoo.com/fedex-affirms-2012-view-buying-boeing-aircraft-130338537.html