MEMPHIS, Tenn. — FedEx on Wednesday reported adjusted earnings of $2.51 a share for the quarter ended Feb. 29, up 23 percent from a year earlier.
The earnings were adjusted to reflect expenses related to legal matters (61 cents a share) and the pending acquisition of TNT Express (6 cents a share).
Analysts had forecast earnings of $2.33 a share on average, according to Zacks Investment Research. A year ago the company had reported adjusted earnings of $2.03 a share.
The December-February quarter included 2015’s busiest day, when FedEx handled 26 million shipments on Dec. 14.
The company said FedEx Ground operating costs were affected by network expansion and “peak season demand that exceeded both volume and package size expectations.”
Also in the FedEx Ground segment, the company recognized a $204 million net expected loss during the quarter from settlements and other legal proceedings associated with classification of drivers as independent contractors.
Frederick W. Smith, FedEx Corp. chairman, said employees rose to the challenges posed by holiday season demands.
“Our strong financial performance was driven by increasing demand for our broad portfolio of FedEx business solutions which helped increase revenue and adjusted profit for the corporation,” Smith said.
“We sincerely appreciate the peak season efforts of our FedEx team members who delivered great service despite the challenges of stronger-than-expected shipping demand, driven by the growth in e-commerce.”
The company narrowed its adjusted earnings forecast to $10.70 to $10.90 a share for fiscal 2016, before year-end mark-to-market accounting adjustments.
It said the outlook assumes moderate economic growth and excludes certain legal matters as well as any TNT-related costs or operating results. The capital spending forecast for the fiscal year is now $4.8 billion.
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