DALLAS (AP) - The growing economy, lower taxes and changing habits of American shoppers are helping boost profit at FedEx Corp.
The delivery giant said Monday that it earned $835 million in the quarter that ended Aug. 31, a 40 percent increase from a year ago.
Still, the results fell short of Wall Street expectations, and shares of the Memphis, Tennessee-based company fell in after-hours trading.
FedEx and rival United Parcel Service Inc. are benefiting from strong pricing power as online shopping continues to boom. Some analysts predict that growing global demand, along with consumers' expectations for speedy delivery of their online purchases, will help the company heading into the crucial Christmas shopping season.
The company has predicted a record holiday season, although Chairman and CEO Fred Smith has warned against protectionist trade policies, which he said have been shown to hurt economic growth.
While Smith says tariffs could hurt economic growth, he has noted that so far FedEx has not suffered any direct harm from a widening trade war between the U.S. and China.
FedEx officials have said very little of their shipments involve items covered by tariffs, but that uncertainty over the trade picture was a problem. Analysts said some shippers might move up shipments to beat deadlines for new tariffs.
In its fiscal first quarter, FedEx boosted net income from last year's $596 million.
Adjust earnings were $3.46 a share, excluding the cost of combining Dutch acquisition TNT Express into its own business - significant costs that FedEx expects will continue "over the next few years."
Analysts were expecting adjusted earnings of $3.78 per share, according to a Zacks Investment Research survey of 11 analysts.
FedEx reported a benefit of 50 cents per share from the lower corporate tax rates that President Donald Trump signed into law in December.
Revenue was $17.05 billion, topping the Zacks survey forecast of $16.88 billion.
The company raised its forecast of earnings for the fiscal year that runs through next May by 20 cents per share, to between $17.20 and $17.80 per share. Before the report, analysts surveyed by FactSet had expected $17.38.
FedEx shares closed up 29 cents, at $255.73. In after-hours trading, they dropped $5.73, or 2.2 percent, to $250.
David Koenig can be reached at http://twitter.com/airlinewriter