FedEx more than doubled its profit in its third quarter, thanks to a record holiday season. But the cheery results were dampened by the delivery company's lukewarm outlook for the economy as well as a $3-million payout it will make to settle federal hiring-discrimination charges.
First, the good news: FedEx's income reached $521 million, up 126% from the same quarter a year ago. That's $1.55 per diluted share from 81 cents a share, excluding one-time items. Revenue also improved, increasing 9% to $10.6 billion.
Christmas-time customers kept the company busy with a boom in online shopping. During the period, FedEx set a record for shipments, with 17 million packages sent globally.
After the company’s FedEx Express branch increased its rates to compensate for rising fuel costs, revenue per package soared 8%. However, volume slumped 4% as consumers switched to the company’s ground service.
Less glowy: FedEx said it is not optimistic about the economy going forward, expecting "moderate, but below-trend growth" in the U.S. and worldwide. The company predicted that domestic growth for the year will be 2.1%, below economists' expectations of 2.3%. FedEx’s forecast for 2013 is also gloomier than most.