FedEx Raises Dividend

By Brittney Laryea 

FedEx Corp. raised its quarterly dividend 60%, to 40 cents a share, up from 25 cents previously, on the heels of recent strength by the Memphis-based package mover.

The hike is significantly higher than the delivery giant's past two dividend increases. Last June, FedEx raised its quarterly dividend by 25% to 25 cents a share. Before that, the company boosted its dividend by 33% to 20 cents in June 2014.

The delivery giant's profits have exceeded analysts' expectations for the past two quarters, helped by a boom in e-commerce spending, especially in the latest holiday season. Online shopping has continued its sharp climb in popularity as Americans shift their shopping habits away from brick-and-mortar stores. For shippers like FedEx, more boxes means more business.

The new dividend is payable July 1 to shareholders who own stock at the close of business on June 16.

This year, FedEx increased total capital spending to $4.8 billion, with a focus on its ground division, which handles most of its online business. The company intends to continue the increases for the next two years. Last month, FedEx acquired Dutch parcel company TNT Express for 4.4 billion euros ($5 billion), giving it an extensive ground network in Europe.

Shares of FedEx rose 0.6% to $164.25 after hours.

Write to Brittney Laryea at [e-mail]

(END) Dow Jones Newswires

June 06, 2016 18:44 ET (22:44 GMT)

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