Shares of delivery giant FedEx (FDX) popped 7.32% in early trading Thursday, after the company posted a robust third quarter earnings report with a positive fiscal outlook for the coming quarter, citing a strong holiday season driven by the e-commerce boom.
Shares are now trading at 154.83.
FedEx reported earnings of $2.51 per share on revenue of $12.7 billion for the quarter ending Feb. 29, beating the street estimate of $2.33 per share and on revenue of $12.3 billion, according to Zacks Equity Research.
“Our strong financial performance was driven by increasing demand for our broad portfolio of FedEx business solutions which helped increase revenue and adjusted profit for the corporation,” said Frederick W. Smith, FedEx CEO in a statement.
The increased demand from the e-commerce sector however also meant the company had to post increased capital spending of $4.8 billion, largely stemming from FedEx’s ground division, which generally manages e-commerce shipments.
Net income also fell 19% to $507 million, due to the costs of settling lawsuits.
Investors were likely especially pleased by the news since FedEx has had it rough over the last 12 months, with the stock shedding almost 17% of its value on fears of competition from Amazon and a rough holiday season troubled by delays.
Though FedEx neatly staunched concerns about Amazon (AMZN) being a threat during its earning call Wednesday. EVP for markets development and corporate communication Michael Glenn said the cost of creating a vast delivery network would be “daunting” for Amazon.
The company also raised the floor for its expected earnings in the 2016 fiscal year ending May. The company reported that it expected earnings of $10.70 to $10.90, up from the $10.40 to $10.90 estimated previously.
