FedEx, the courier company, said its profit for the quarter had increased by 7%. That came despite a fall off in revenue in the FedEx Express unit. The company also announced a rate increase would take place starting in January.
FedEx Express, said company officials, would increase the rates in the U.S. by nearly 3.9% starting January 6. Later this year, FedEx would also announce the ground shipment prices for 2014.
After the earnings report was released, shares of FedEx were trading 3% higher during premarket trading. On Wednesday, FedEx Corp announced it had earned $489 million a per share rate of $1.53 during the quarter from June 1 through August 31. That was an increase from the per share rate of $1.45 from the same period last year, while analysts had forecast $1.50 a share.
Revenue for the quarter was up 2% to just over $11.02 billion, which was just above the forecast of analysts at $11 billion.
The forecast for the entire year profit was left unchanged by FedEx. The company’s fiscal year ends in May 2014. Earnings are expected to increase between 7% and 13%, which amounts to $6.63 to $7.01 per share. Analysts have predicted a per share profit of $6.97.
The CFO of FedEx, Alan Graf said the company remained confident it would reach its full year outlook for earnings. Graf also said the company continued to be committed to increasing the operating profit of FedEx Express by $1.6 billion before the end of their 2016 fiscal year.
The FedEx Express unit accounts for over 60% of the entire revenue for the company, but the revenue of the unit was flat during the last fiscal quarter.
FedEx has struggled with a fall off in international priority shipping as its customers have shifted to shipping options that are less expensive. In addition, the fuel surcharges for FedEx Express have dropped from last year.