FedEx Jumps 12% on Profit Beat, Improved Margins

FedEx shares surged in premarket trading Friday after the parcel giant beat estimates for quarterly profit and reported a higher operating margin at Express, its largest unit.

Shares of the company rose 12.4% to $297.75 before the bell, with rival UPS up 3.5%.

FedEx has taken several measures to protect margins at Express, including parking aircraft, reducing flight hours and efforts to fly fewer jets, with better capacity utilization.

The Memphis, Tennessee-based company also said on Thursday it plans to buy back $500 million worth of its shares in the current quarter, with its board approving a new $5-billion share repurchase program.

Operating margin at its Express overnight-delivery provider rose 2.5% in the February fiscal quarter, from 1.2% a year ago.

“FedEx hit all the high notes this time with lower capex, a reloaded buyback program and a beat in…