FedEx Corporation’s (FDX) Third-Quarter Profit Beats Expectations

FedEx Corporation (NYSE: FDX) announced its third-quarter results on Thursday. The company saw its quarterly profit more than double as strong export volumes in Asia offset a flat demand in U.S.

FedEx’s International Priority business saw an 18% increase in volume, which was led by exports from Asia. However, daily domestic package volume increased only 1% due to the weak economic environment in U.S. According to analysts, businesses like FedEx generally do well at the beginning of an economic recovery. FedEx reported profit of $239 million, or $0.76 per share in its third-quarter, compared with a profit of $97 million, or $0.31 in the same period last year. The average analyst estimate was for a profit of $0.72 per share. The company saw its revenue increase by 7% to $8.7 billion, beating average analyst estimate of $8.4 billion.

FedEx CEO, Fred Smith, said, “An improving global economy drove solid financial performance in the quarter. In fact, the recovery is broadening." FedEx also announced the reinstatement of employee compensation programs, which were cut to cope with the recession.

The company raised its 2010 EPS forecast from $3.45-$3.75 to $3.60-$3.80. On average, analysts expect 2010 EPS of $0.64. The company also raised its 2010 capex outlook from $2.6 billion to $2.9 billion.

FedEx shares were down 3% initially on Thursday before recovering. Eric Marshall, director of research at Hodges Capital Management, said, “There may have been some anticipation that they could do even better.” The company’s shares were up 2.61% to $92.14 at 2.58 p.m. in New York.