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FedEx shares soar almost 9% as quarterly results top expectations

LOS ANGELES (Reuters) – Shares of FedEx Corp (FDX.N) jumped 8.5% in extended trading on Tuesday after a surge in pandemic-fueled home deliveries helped the U.S. package carrier post better-than-expected quarterly profit and revenue.

Adjusted profit at Memphis-based FedEx fell by almost 50% to $663 million, or $2.53 per share, for the quarter ended May 31. Revenue slipped to $17.4 billion from $17.8 billion a year earlier.

Analysts, on average, expected a profit of $1.52 per share on revenue of $16.4 billion, according to Refinitiv IBES data.

FedEx said the novel coronavirus pandemic hit virtually all of the company’s revenue and expense line items. Executives declined to provide an earnings forecast for fiscal 2020, citing the uncertain timing and pace of an economic recovery.

FedEx is grappling with a flood of coronavirus-related e-commerce shipments as it rebuilds from its split with Amazon.com Inc (AMZN.O), a major customer, and the costly integration of TNT Express in Europe.

Business closures and the profound shift to online shopping are squeezing profits at FedEx and rival United Parcel Service Inc (UPS.N). Residential e-commerce deliveries are less lucrative than business deliveries because they involve far-flung addresses and fewer packages per stop.

FedEx executives said they are beginning to see a recovery in business-to-business shipments as they attack residential delivery costs.

FedEx Ground, which handles more e-commerce home deliveries, reported a 20% revenue increase for the quarter and a 17% drop in operating income.

Revenue at FedEx Express, which skews toward commercial deliveries, fell 10% and operating income dropped 56%.

Total domestic package volume fell 9% for the quarter.

FedEx shares, which hit a record high of almost $250 in October 2017, were up $11.90 at $152.00 in after-hours trading on Tuesday.

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Business

Nike swings to quarterly loss on COVID-19 impact; shares fall

(Reuters) – Nike Inc (NKE.N) on Thursday reported a loss for the fourth quarter, as retailers had to shut stores for weeks due to lockdowns spurred by the COVID-19 pandemic, sending shares of the world’s largest footwear company down 3.5%.

The company’s wholesale business, through which it sells merchandise to department stores and footwear retailers, saw a 50% fall in product shipments in the quarter.

Retailers have suffered due to store closures brought in place by government-led lockdowns, forcing many to limit their business to online operations.

Nike’s investments in its digital platform over the years helped the company record a 75% rise in online sales, as many consumers shopped for activewear from the comfort of their homes.

Net loss came in at $790 million, or 51 cents per share, compared with a profit of $989 million, or 62 cents per share, a year earlier.

Revenue fell 38% to $6.31 billion in the quarter ended May 31. Analysts on average had expected $7.32 billion, according to IBES data from Refinitiv.

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