NEW YORK, Dec 17 ― The US courier giant FedEx reported higher than expected turnover and profit yesterday, despite rising labour costs, and raised its earnings forecast for the year.

Although lockdowns and restrictions are no longer in place in the United States, e-commerce continues to grow, which benefits delivery services such as FedEx.

The company's turnover rose 14 per cent to US$23.5 billion (RM99 billion), significantly more than expected by analysts, who had pegged it at US$22.47 billion.

All the group's sectors benefited from the growth surge, from the urgent delivery service of FedEx Express to the ordinary transport of mail and parcels in FedEx Ground.

The company's freight service showed the highest growth rates over the year, up 17.5 per cent.

FedEx has nevertheless had to deal with a scarcity of workers for hire, which caused disruption and an increase in the cost of labour and transport, the group said in a statement.

In total, additional costs rose to around US$470 million compared with the same period in 2020. That cost hike weighed on the company's operating margin, but the group managed to limit the decrease year-on-year, from 7.1 per cent to 6.8 per cent, which was better than the previous quarter's 6.4 per cent.

In the latest quarter ― the second of its staggered 2022 fiscal year  from June to May ― the company posted net income of US$1.04 billion and adjusted net earnings per share of US$4.83, better than the US$4.28 that had been expected.

FedEx said it plans to accelerate hiring and to increase its rates, moves that are likely to slow cost increases and improve margins.

The company has raised its adjusted earnings forecast for its full current fiscal year and now expects a range of US$20.50 to US$21.50, down from US$19.75 to US$21.00 until now.

The group, which is still led by its founder Frederick W. Smith, who has been at the helm for 50 years, also announced the launch of a share buyback programme with a budget of US$5 billion.

The prospect of buybacks as well as the better than expected results pleased Wall Street, and stock was up 4.92 per cent after the close of the market. ― AFP