FedEx climbs as strong e-commerce demand during an 'unprecedented' holiday season drives earnings beat

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FedEx said the increased volume of packages offset its higher labor costs and weather-related expenses during the quarter ending in February.

Its CEO said, "We expect demand for our unmatched e-commerce and international express solutions to remain very high for the foreseeable future.Shares of FedEx rose as much as 7% on Friday after the delivery-services company announced strong profits and revenues for the fiscal third quarter of 2020. The beats were driven by an "unprecedented" surge during the holiday season as the US economy slowly recovered from the pandemic.

, while net income tripled to $939 million versus $371 million in the same period last year. Revenue also beat estimates, rising 23% to $21.51 billion versus the expected $19.97 billion. The winter storms in February cut the company's operating income by around $350 million. This included the company's largest hub in Memphis, Tennessee, and FedEx Express hubs in Indianapolis and North Texas. Still, the company was able to recover thanks to the strong e-commerce demand as well as the decreased competition for air-freight, allowing the company to raise prices.

 

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Correction: DeJoy messes with the postal service, forcing people to private shipping companies which will cost more.

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