FedEx Thrives Despite Rising Fuel Prices

Article Excerpt

FEDEX CORP. $113 (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; WSSF Rating: Average) provides door-to-door delivery of packages and documents through its own fleet of roughly 700 aircraft and 45,000 ground vehicles. The United States accounts for about twothirds of its revenue. The company’s strong reputation for quick and reliable deliveries has helped it pass along higher fuel costs to its customers, without hurting volumes. Thanks to a 4% rise in overall volumes, FedEx earned $1.82 a share (total $568 million) in its fourth fiscal quarter ended May 31, 2006, up 24.7% from $1.46 a share ($448 million) a year earlier. The company is also handling more overnight shipments, which generate higher profits for it than regular deliveries. Revenue rose 10.4%, to $8.5 billion from $7.7 billion. FedEx recently agreed to pay $780 million for the less-than-truckload (LTL) operations of Florida-based Watkins Motor Lines. LTL services consolidate the freight of several different customers on a single truck. The company ended fiscal 2006…

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