FedEx is ready for additional COVID-19 vaccine distribution here and abroad, touts 'unparalleled' delivery network
Delivery company did not provide an earnings outlook for 2021, citing continued uncertainty
FreedomWorks economist Steve Moore weighs in on FedEx’s earnings report, which shows record earnings, U.S. economic recovery and possible stimulus.
After successfully delivering the first shipment of the United States' coronavirus vaccine created by Pfizer and BioNTech, FedEx President and Chief Operating Officer Raj Subramaniam told analysts Thursday that the company's team "stands ready to transport additional vaccine shipments internationally" as needed.
"Our unparalleled Express network was built for time-definite shipments such as these vaccines," Subramaniam said during the company's second-quarter earnings call for fiscal year 2021. "Simply put, a global health of this scale requires a network of our scale to address. This is who we are and what we do."
FedEx's delivery network is comprised of roughly 680 aircraft, 200,000 vehicles and nearly 600,000 employees.
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The announcement came after FedEx reported shipping volume for its Ground unit surged 28% year-over-year in the latest quarter to 12.3 million, as consumers purchased everyday items online ahead of the holiday season.
Meanwhile, the company's Express unit, which is responsible for COVID-19 vaccine distribution, posted a 10% jump in volume year-over-year. Revenue per package jumped 7% to $9.24 for the quarter.
The package delivery service posted a profit of $1.23 billion, or $4.55 a share, on revenue of $20.6 billion compared to a profit of $560 million, or $2.13, on revenue of $17.3 billion a year earlier.
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The Memphis-based delivery services company anticipates "a modest increase in volumes from the delivery of COVID-19 vaccines" through the remainder of 2021 due to ongoing freight capacity constraints caused by government travel warnings and restrictions.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FDX | FEDEX CORP. | 294.45 | +2.17 | +0.74% |
However, the company did not provide an earnings outlook for fiscal 2021, citing continued uncertainty and higher costs stemming from the coronavirus pandemic.
“While the overall environment remains uncertain, we expect earnings growth in the second half of fiscal 2021 driven by the anticipated heightened demand for our services as we continue to execute on our strategic priorities,” FedEx Executive Vice President and Chief Financial Officer Michael Lenz added.
FedEx closed at $292.26 per share at the end of Thursday's trading session. The stock is down more than 3% in after-hours trading Thursday as of the time of publication.