[ad_1]
FedEx
Corp.
FDX 0.11%
Leaders said fears of escalating trade between China and the United States were beginning to hurt economic activity between the two countries.
Fares applied so far have affected about 10% of FedEx's business in China, where the carrier generates about 2% of total revenue. But uncertainty over new measures, including a series of additional US $ 200 billion tariffs on Chinese imports and Beijing retaliation, is creating tension and slowing economic activity.
"The story is very clear: the countries seeking the most open markets are the ones that thrive the most and the ones whose citizens' incomes increase the most," said FedEx President Fred Smith. "Mercantilism does not work."
Smith made the comments as FedEx announced a jump in profits and first quarter fiscal revenue due to higher shipment volumes, rate increases and lower tax payments. .
The net result of the carrier, however, was affected by two compensation measures: higher premiums for management and wage increases for hourly workers. Provisions for premiums increased on annual results which compares favorably with the results of 2017 which were tainted by a cyberattack. The salary increase was postponed to April of October as a result of the adoption of the law on tax cuts and jobs.
FedEx's core business continued to show that demand for its transportation services remains strong. Total revenue increased 11% to $ 17.1 billion, with double-digit growth in all three key segments of FedEx.
The FedEx Express segment recorded a 5% increase in package volume and 3% of revenue per package, while its ground segment saw a 7% increase in package volume and 6% growth of sales.
FedEx is planning the next holiday season, as the growth of e-commerce should lead to record volumes.
Last week, FedEx announced it would add Saturday's delivery to its ground delivery unit year-round, after just six days a week or more during the busiest weeks during the holidays. David Bronczek, Chief Operating Officer of FedEx, said adding another day of operation throughout the year would give the company more bandwidth to manage the growth of packages without having to add additional buildings .
"We plan to acquire significant capacity and volume without additional facilities," said Bronczek.
For the period, FedEx recorded a profit of $ 835 million, against $ 596 million a year earlier. Taking into account the integration fees and other items, FedEx said its earnings reached $ 933 million, or $ 3.46 per share, against $ 683 million (or $ 2.51 per share).
FedEx has raised its earnings guidance for the year to a range of $ 17.20 to $ 17.80 per share.
Source link
