FedEx Corp. reported higher-than-expected quarterly profit on Thursday, despite persistent labor issues and declining demand at its subsidiary Groundwhich handles most of its Home delivery e-commerce and drives the company’s growth.
The actions of FedExwhich are down about 20% from a year earlier, were up 3.7% at $236.52 in after-hours trading.
The Memphis, Tennessee-based company’s adjusted earnings for the fiscal fourth quarter ended May 31 were $1.8 billion, or $6.87 per share, compared with $1.36 billion, or $5.01 per share. , from the previous year.
Revenue grew to $24.4 billion from $22.6 billion a year ago, driven in part by fuel surcharges.
FedEx issued a full-year forecast for earnings per share of $22.50 to $24.50 excluding some items. It set capital spending at $6.8 billion, with a priority on investments to improve efficiency, increase automation, and modernize vehicles and facilities.
In the past week, FedEx expanded its board under a cooperative agreement with activist investor DE Shaw Group, which has a 1% stake in the company.