Stock market recommendations: Higher package volumes push up FedEx earnings

FedEx Corp., New York symbol FDX, delivers packages and documents in the U.S. and over 220 countries and territories.

FedEx is one of the stocks we analyze in Wall Street Stock Forecaster, our newsletter that offers stock market recommendations for the U.S. markets.

For the fiscal year ended May 31, 2011, FedEx’s revenue rose 13.2%, to $39.3 billion from $34.7 billion in 2010. The company earned $1.45 billion, or $4.57 a share, up 22.6% from $1.2 billion, or $3.76 a share. If you exclude unusual items, FedEx earned $4.90 a share in 2011. That matched the consensus estimate.

The number and weight of packages grew throughout fiscal 2011, as the economy continued to recover from the recession. The international air delivery business was particularly strong, with average daily package volume up 10% and average daily weight up 25%.

The company plans to increase its capital spending by 23.5% in fiscal 2012, to $4.2 billion from $3.4 billion in 2011. The company will use these funds to buy new planes and trucks, upgrade existing facilities and invest in new computers.

FedEx recently raised its quarterly dividend by 8.3%, to $0.13 a share from $0.12. The new annual rate of $0.52 yields 0.55%.

We updated our buy/sell/hold advice on FedEx and other U.S. stock market recommendations in our June 24, 2011 Wall Street Stock Forecaster hotline, which you can immediately view when you take a 1-month free trial to Wall Street Stock Forecaster. Click here to get started right away.

(Note: If you are a current Wall Street Stock Forecaster subscriber, please click here to view Pat’s recommendation. Be sure to log in first.)


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