Analyst Note| Matthew Young, CFA |
FedEx’s fiscal second-quarter 2021 (ended November) revenue expanded a solid 19% year over year, above our expected run rate--especially at Ground--and ahead of the 13% rise last quarter. Consistent with recent quarters, the marked e-commerce shift is driving substantial residential package growth at Ground--total average daily volume grew 29%. Additionally, limited airlift capacity is boosting Express’ international export volume and retailer restocking is rejuvenating Freight’s LTL demand. Ground yields rose an impressive 7% as constrained last-mile capacity (exacerbated by a robust peak) has lifted FedEx’s pricing power. Express' revenue per package grew 2%, while Freight’s yields rose 4%. B2B package activity remains sluggish, especially in Europe, but is improving.