The latest news is that U.S. express delivery company FedEx Corp on Thursday restored its original forecast for fiscal 2022, even as ongoing labor difficulties dented its profits before the holiday peak season .
The company’s shares rose 5% to $250.50 in after-hours trading as its fiscal second-quarter adjusted profit was flat compared with the same period last year.
FedEx Chief Operating Officer Raj Subramaniam said labor pressure should ease in the future and we are largely staffed for peak periods .
For now, consumers' concerns about delivery delays that could repeat the 2020 "shipping" pandemic during this year's holiday season have eased. Retailers have eased pressure on carriers such as FedEx and United Parcel Service by urging early shopping and expanding pickup and Gig-delivery options. At the same time, most stores remain open despite the accelerating number of people infected with the Omicron variant.
Memphis, Tennessee-based FedEx now expects full-year earnings, excluding items, of $20.50 to $21.50 a share, as it initially forecast. In September, FedEx lowered that range to $19.75 to $21.00 a share.
Adjusted net income for the quarter ended Nov. 30 was $1.3 billion, or $4.83 per share, flat from a year earlier.
In the company's second fiscal quarter, labor shortages again disrupted its normal workflow , resulting in network inefficiencies , increased procured transportation costs and higher wage rates. These factors increased its costs by about $470 million year-over-year, mainly in FedEx Ground. The company's first fiscal quarter had these costs of $450 million. In its most recent quarter, FedEx paid “significantly” higher taxes but benefited from lower fuel prices. But its revenue rose 14% to $23.5 billion, driven in part by rising demand for e-commerce home deliveries , including some holiday gifts.
However, experts and some customers say FedEx lags behind UPS and the U.S. Postal Service in on-time deliveries.
From Nov. 14 to Dec. 4 , including the Thanksgiving and Cyber Monday holiday shopping days , FedEx's on-time rate was 85.7%, UPS was 96.4% and the U.S. Postal Service was 95.1%, according to ShipMatrix, an auditor of delivery invoices. USA Fedex |
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