FedEx Corp. (FDX) reported yesterday a record quarterly sale of $20 billion and earnings that more than doubled due to a year of increasing online purchases during the ongoing COVID-19 pandemic. The subsequent lockdowns have unleashed a flood of online shopping, allowing companies like FedEx to hike their rates due to limitations on how much they can deliver, especially during the holiday rush.
The company reported that its fiscal second-quarter earnings rose by 114% to $4.55 a share versus $2.13 per share from a year ago. Additionally, their revenue jumped by 19% to $20.6 billion from last year’s $17.3 billion. This is most likely due to volume growth in their FedEx International Priority sector, increases in their U.S. domestic residential package services, as well as pricing gains across all segments.
Following this, the company declined to forecast for the current quarter due to continued uncertainty.
This report comes after its rival UPS (UPS) beat Q3 views in late October but warned on profits margins amid a boom in less lucrative residential deliveries. Currently, UPS stock gained only 2.6%, while XPO Logistics (XPO) dipped by 0.7%.
Overall, to help capitalize on the continued growth of e-commerce and the holiday season, FedEx has agreed to acquire e-commerce platform ShopRunner, which prompted a short rally for their stocks as well. This move namely came after Amazon’s (AMZN) announcement that it is increasing its logistics and delivery business.
Additionally, both companies began shipping Pfizer-BioNTech’s (PFE & BNTX) coronavirus vaccine this past weekend. With the Food and Drug Administration poised to authorize Moderna’s (MRNA) drug within days, both companies will be launching monumental logistics efforts to export the vaccines, which will last well into 2021.
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