US parcel giant improves its profit fourfold; plans to invest over $7 billion

You can read this article in 3 minutes

US parcel giant improves its profit fourfold; plans to invest over $7 billion

FedEx’s revenue grew 21% for the fiscal year ended May 31st, 2021 compared to the year before, reaching the level of $84 billion. The logistics giant’s net profit reached $5.2 billion in this period, compared to $ 1.3 billion in the 2019/2020 fiscal year. This is a nearly fourfold increase.

Although the results of the previous financial year were understated by the beginning of the pandemic in spring 2020, this year’s increases are the result of greater demand for, for example, for courier services in the US market, as well as an increase in the international package segment. A case in point here is FedEx Express, which recorded a year on year increase in operating profit of 182% in the 2020/2021 financial year.

The last quarter of the financial year, March-May 2021, was instrumental in contributing to the full-year result. FedEx’s revenues increased by 30% to $ 22.6 billion (27% of the annual result), while net profit reached $ 1.87 billion (with a loss of over $300 million in the corresponding quarter of 2020). This accounted for nearly 36% of the annual profit.

The company has not disclosed any forecasts for the financial year 2021/2022. However, it intends to invest $7.2 billion, especially in key segments such as e-commerce. FedEx also plans to expand its transport capacity, modernize its fleet and warehouse infrastructure, and allocate some funds to the development of automation.

“The ongoing execution of our strategic initiatives has driven significant improvement in our fourth quarter results and highlights the continued strength of our business,” said Michael C. Lenz, FedEx Corp. executive vice president and chief financial officer. “For fiscal 2021, we delivered record financial results while also recognizing the valuable contributions by our team members. We expect continued strong momentum in fiscal 2022, and our investments are focused on the areas of greatest growth and highest returns, like e-commerce, to position us for sustained long-term growth in earnings, cash flows, and returns.”


Photo: FedEx

Trending articles
Trending articles