MEMPHIS: Growth in online shopping drove a 9 percent increase in average daily shipping volume for FedEx Corp.’s ground business in the second quarter, the company reported Wednesday.
Revenue for FedEx Ground spiked 32 percent to $4.05 billion for the quarter that ended Nov. 30, up from $3.06 billion a year ago. However, the ground revenue was inflated by the acquisition in January of Blawnox-based logistics firm Genco, a specialist in handling product returns. Ground revenue per package increased 10 percent.
The Memphis-based company has invested heavily in its ground network, spending $1.6 billion this year to keep up with consumer demand driven by e-commerce.
The FedEx Ground delivery unit is based in Moon and employs about 3,000 people in the region.
The gains in its ground business countered declines in express revenue, which was down 6 percent to $7.02 billion. Total revenue increased 4 percent for the quarter to $12.5 billion.
FedEx Corp.’s second-quarter profit topped analyst estimates as higher base rates and lower costs boosted the bottom line.
FedEx reported net income of $691 million, or $2.44 per share, up 4 percent from $663 million, or $2.31 per share, a year ago.
Adjusted earnings were $2.58 a share, beating the $2.50 average of analyst estimates compiled by Bloomberg.
Operating expenses increased 4 percent to $11.3 billion. A 42 percent drop in fuel costs helped offset higher expenses for salaries and employee benefits.
