FedEx announced that it expects earnings to be in the range of $1.05 to $1.25 per share for the first quarter ending August 31, up from a previous guidance for the quarter of 85 cents to $1.05 per share. FedEx also said the new earnings outlook is up 81% to 116% from the 58 cents earnings per share a year ago.
For the full year, FedEx expects earnings per share of $4.60 to $5.20, up from $4.40 to $5.00. The company reported earnings of $3.76 per share last year.
"Our revenue and earnings growth are exceeding original expectations, primarily due to better-than-anticipated growth in FedEx Express and FedEx Ground volumes," said CFO Alan Graf Jr. in a statement. "Our package volume growth rates in our first quarter are continuing at a pace similar to our fourth quarter."
The higher-margin FedEx International Priority package and freight services business continues to experience strong demand, with package volumes expected to grow more than 20% again this quarter.
With the improved outlook, FedEx is also planning to fully restore the company match for 401(k) plans at all FedEx companies effective January 1, 2011. The cost of this restoration is included in the company's earnings outlook, the company said.
The news sent FedEx shares 4.5% higher in premarket trading.