DALLAS (AP) — The boom in online shopping may be hurting some store-based retailers, but it is doing wonders for FedEx Corp.
The package-delivery giant said Wednesday that its fiscal fourth-quarter profit rose sharply thanks to the growth in e-commerce, which is boosting FedEx's ground-shipping business at a time when its core express-delivery segment is flat.
FedEx's earnings of $2.46 per share beat Wall Street's forecast by a dime. Revenue also topped expectations.
The shares jumped $6.54, or 4.7 percent, to $146.85 in midday trading.
CEO Fred Smith said the "outstanding" fourth quarter capped a solid year and put the company in strong position for the new fiscal year, which ends in May 2015. FedEx said that it would earn between $8.50 and $9 per share in the new year. That is in line with analysts' average expectation of $8.74, according to FactSet.
Cowen and Co. analyst Helane Becker said the company's forecast was a plus after Wall Street had grown more cautious about management's outlook in recent weeks.
The Memphis-based company said that it earned $730 million in its fiscal fourth quarter, which ended May 31, compared with $303 million a year ago, when write-downs weighed on the results. Excluding items, FedEx would have earned $2.13 per share in last year's fourth quarter.
Revenue rose 3.5 percent to $11.84 billion. Analysts surveyed by FactSet expected $11.66 billion.
Revenue in the ground-shipping business grew 8 percent, helped by gains in e-commerce. That helped offset slower growth in FedEx Express, which accounts for more than half the company's revenue.
FedEx's revenue per package on ground shipments rose 2 percent because of rate increases and surcharges on residential deliveries. The same statistic was flat for U.S. deliveries in the key express business.
Last month, FedEx announced that it will start charging more for large but light packages that take up space in its delivery trucks and add to costs. That includes bulky products that consumers buy online instead of in stores. Rival United Parcel Service Co. said Tuesday that it would do the same by considering a bulky package's dimensions and not just its weight in setting prices for ground shipments.