FedEx Expects Shipments to Rise 12% in Holiday Season (FDX)

FedEx Corporation (NYSE: FDX) shares are rising in trading today after the Memphis, Tennessee-based logistics company forecast record holiday shipping.

FedEx shares rose to an intra-day high of $82.40. At last check, the stock was trading 2.94% higher at $81.67. FedEx shares have risen 8.51% in the last three trading sessions.

FedEx, today, said that it expects to ship 260 million packages between Thanksgiving and Christmas, representing an increase of 12% over the same period in the previous year. The company expects to ship 17 million packages on December 12, which it expects to be the busiest day of the year.

However, the company noted that the sharp rise in package volume would be driven by its e-commerce related residential service, SmartPost. The service is FedEx’s least profitable. The company said that the increasing use of online-shopping will lead to big volume increases for SmartPost residential service.
Earlier this month, FedEx CEO Fred Smith had said that retail sales will increase 2.5%-3% during the holiday season.

Due to the increase in shipments, FedEx said that it will hire 20,000 workers during the holiday season. In 2010, the company had hired 17,000 workers during the holiday season.

FedEx, however, has not made any changes to its overall financial outlook as the trends have already been included in the previous forecast. FedEx had lowered its outlook for fiscal year 2012 last month. The company expects fiscal 2012 earnings to come in between $6.25 per share and $6.75 peer share. Alan B. Graf, Jr., FedEx’s CFO, said last month that the company slightly reduced its earnings forecast to reflect current business conditions. Graf said that the company is aggressively working to adjust its cost structure to match demand levels.

For the first quarter of fiscal 2012, FedEx reported revenue of $10.52 billion, representing an increase of 11% over the same period in the previous year. The company’s net income for the first quarter was $464 million, representing an increase of 22% over the same period in the previous year.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.