FedEx Corp's fiscal second-quarter earnings jumped 76 percent to close to half a billion US dollars as the shipping company continued to benefit from strong performance in its ground-shipping segment and improved profitability in its freight operations.

    Chief executive Frederick Smith noted rising demand for residential delivery services amid the growing popularity of online shopping for the holidays, reported Dow Jones Newswires.

    FedEx has lately seen solid demand for its US ground shipping services, which has helped to offset softer express shipping volume, particularly in Asia. The company's freight unit, meanwhile, has shown steady signs of improvement as the company sheds lower-margin business.

    The company's role in transporting a wide swath of goods, from e-commerce purchases to electronics from China, makes it a closely watched barometer of the health of the global economy.

    For the quarter ended November 30, FedEx reported a profit of $497 million, or $1.57 a share, up from $283 million, or 89 cents a share - or $1.16 excluding one-time items - a year earlier. The company's September prediction called for earnings of $1.40 to $1.60 a share.

    Revenue rose 9.9 percent to $10.59 billion, just shy of the $10.61 billion estimate held by analysts.

    Operating margin widened to 7.4 percent from 4.9 percent.

    The express-shipping segment - by far the largest top-line contributor - saw revenue rise 9.9 percent to $6.58 billion, helping drive a 30 percent improvement in the segment's operating profit. International-priority average daily package volume declined three percent, driven by declines from Asia.

    The ground-shipping segment's revenue jumped 13 percent to $2.34 billion, contributing to a 34 percent increase in operating profit. Average daily package volume grew four percent, driven by increases in Meanwhile, FedEx Corp has ordered 27 new Boeing Co 767-300F aircraft worth $4.7 billion at list prices as it plans to retire some of its aging aircraft, reported Reuters.

    The company also has exercised options for two additional Boeing 777 freighters.

    The world's No. 2 package delivery company said three of the 767s would be delivered in fiscal 2014 and six per year in fiscal 2015-2018. FedEx said the 767s would replace FedEx Express' MD10 aircraft with a 30 percent increase in fuel efficiency and a 20 percent reduction in unit operating costs.

    FedEx has also been considering the competing Airbus EADS A330 for its upgrade, according to sources.

    The company also said it would delay delivery of 11 larger 777 freighters it has on order.

    Softening cargo traffic has caused some airlines to rethink their freighter purchases in recent months. The International Air Transport Association (IATA) has warned of further declines after a significant cargo market deterioration in the third quarter.

    FedEx is the largest operator of 777 freighters, with 17 aircraft in operation and with orders and options for an additional 41 aircraft, Boeing said.

source:http://www.cargonewsasia.com/category.aspx?id=7