A record number of holiday packages are on track to arrive this year and package delivery companies appear to be handling the load well.
FedEx Corp offered the latest update on Tuesday on its busiest time of the year as it released its fiscal second-quarter earnings report.
“We are on track for another record holiday shipping season and customer service levels have been outstanding,” FedEx chairman and CEO Fred Smith said. “We plan year around to meet the intense challenges of the peak season as average daily volumes can more than double.”
Aside from some short-term delays at United Parcel Service Inc (UPS) last month because of a surge in online orders after Thanksgiving, few delivery problems have been reported this year.
UPS restored normal delivery times after the initial surge.
So as long as consumers placed their orders in time, their gifts should make it on time, said Satish Jindel, founder and president of ShipMatrix, which tracks the shipping industry.
“There should be no concern about packages not getting there by Christmas Eve,” Jindal said.
UPS spokesman Steve Gaut said the company expects to deliver about 750 million packages during this holiday season, up from 712 million last year.
FedEx has not released an estimate of how many packages it would handle during the holidays.
ShipMatrix estimates that together FedEx, UPS and the US Postal Service are delivering about 60 million packages per day during the holidays.
FedEx on Tuesday said that its second-quarter earnings grew 11 percent to US$775 million, or earnings per share of US$2.84.
That is up from US$700 million, or earnings per share of US$2.59.
The Memphis, Tennessee-based company said its earnings would be US$3.18 per share if one-time costs were excluded.
The 13 analysts surveyed by Zacks Investment Research expected earnings per share of US$2.87 on average.
The package delivery company reported revenue of US$16.31 billion. Nine analysts surveyed by Zacks expected US$15.67 billion.
FedEx boosted its outlook for full-year earnings per share to a range of between US$12.70 and US$13.30.
The firm had earlier predicted fiscal earnings next year would fall to between US$11.05 and US$11.85.
The company’s stock was up US$3.36, or 1.4 percent, to US$245.90 in extended trading after the release of the earnings report.
FedEx shares have increased 30 percent since the beginning of the year, while the S&P 500 has increased 20 percent.
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