FedEx profit rises on increase in volume and shipping rates

MEMPHIS — Higher rates, steady business fueled by economic growth and tax benefits helped FedEx Corp. boost fourth-quarter profit 10 percent to $1.13 billion.

The quarter that ended May 31 was the last in FedEx’s fiscal year. The Memphis, Tennesseebased company forecast earnings in the coming fiscal year of between $17 and $17.60 per share, roughly in line with analysts’ forecast of $17.48 per share.

CEO Fred Smith said Tuesday he was optimistic the company will increase earnings, cash flow and profit margins. On a conference call with analysts, however, he warned against protectionist trade policies, which he said have been shown to hurt economic growth.

FedEx and some industrial companies have seen their stocks sell off recently as trade tension grows between the U.S. and China. President Donald Trump is threatening to target an additional $200 billion in Chinese goods for 10 percent tariffs. He previously ordered 25 percent tariffs on $50 billion in Chinese goods. Those tariffs, set to start taking effect July 6, were matched by China’s threat to penalize U.S. exports.

So far, however, a company official said, FedEx has not seen shippers change their activity because of looming tariffs.

FedEx said that excluding certain write-downs and costs of folding Dutch delivery firm TNT Express into its own express business, it would have earned $5.91 per share. Analysts were expecting $5.72 per share, according to a survey of 10 analysts by Zacks Investment Research.

Revenue rose 10 percent to $17.31 billion, also topping analysts’ forecasts. Nine analysts surveyed by Zacks expected $17.19 billion.

Shares of FedEx rose $1.11 in after-hours trading, to $259.50, after falling $5.26, or 2 percent, to 258.39, in regular trading.

The shares have climbed 3.5 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased slightly more than 3 percent.