New York (CNN Business)Despite taking a hit from lousy, snowy weather in February, FedEx is thriving thanks to online shopping.
Shares of FedEx (FDX) soared more than 6% Friday after the shipping giant reported earnings and revenue for its latest quarter that easily topped forecasts and provided a healthy outlook for 2021.
Sales increased more than 20% in the quarter to $21.5 billion, while net income more than doubled to $890 million.
Much of the growth was due to surging demand for products that people are buying on their phones and computers — a trend that isn’t going away anytime soon.
FedEx’s results are even more impressive given the company’s messy breakup with Amazon (AMZN) in 2019. But FedEx has found many willing retailers to partner with and has more than replaced the lost revenue from Amazon.
“We remain excited about the diversification and evolution of the e-commerce market,” said FedEx chief marketing and communications officer Brie Carere during a conference call with analysts Thursday evening. “Some of our largest retail customers reported e-commerce growth rates in the high double and even triple digits through 2020,”
Carere added that e-commerce accounted for 20% of all US retail sales in the fourth quarter of last year, significantly above pre-pandemic levels.
The Covid-19 outbreak and resulting digital shopping surge has been a boom for both FedEx and top rival UPS (UPS). Shares of FedEx have soared 150% in the past 12 months while UPS stock is up 70%.
Carere shrugged off concerns that FedEx would lose momentum as more people venture out and shop in the physical world again now that Covid-19 vaccinations are on the rise.
She conceded that there is “the potential for a short-term deceleration in e-commerce shopping” but that digital commerce would continue to grow as a percentage of the overall retail market.
FedEx — and UPS, for that matter — are also benefiting from contracts to ship Covid-19 vaccines and related supplies around the globe. That includes a deal in the US to ship the Moderna (MRNA) and Pfizer (PFE)/BioNTech (BNTX) shots as well as the newly approved single dose Johnson & Johnson (JNJ) vaccine.
FedEx CEO Fred Smith said during the analyst call that the company is transporting vaccines to more than 220 countries and territories around the world.
The vaccine deliveries so far have been “almost been flawless,” he added, noting that “you can count on your hand the number of issues with the number of vaccines we’ve delivered in the millions.”
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