FedEx Corp. (NYSE: FDX) today reported earnings of $2.14 per
diluted share for the second quarter ended November 30, up 36% from
last year’s $1.57 per share.
“FedEx posted strong results and a higher operating margin in
the second quarter, with continued growth in volumes and base
yields in each of our transportation segments,” said Frederick W.
Smith, FedEx Corp. chairman, president and chief executive officer.
“We are in the final stages of this year’s peak shipping season,
and I’d like to thank the more than 300,000 dedicated team members
around the world for once again delivering outstanding service to
our customers during the holidays.”
Second Quarter Results
FedEx Corp. reported the following consolidated results for the
second quarter:
• Revenue of $11.9 billion, up 5% from $11.4
billion the previous year
• Operating income of $1.01 billion, up 22%
from $827 million last year
• Operating margin of 8.5%, up from 7.3% a
year ago
• Net income of $616 million, up 23% from
last year’s $500 million
Operating income and margin increased primarily due to higher
volumes and base yields in all three transportation segments.
Results in the second quarter also included benefits from the
company’s profit improvement programs, lower pension expense and a
slightly positive net impact from fuel. These benefits were
partially offset by higher aircraft maintenance expense due to the
timing of aircraft maintenance events.
Share repurchases benefited second quarter earnings by $0.16 per
diluted share.
Outlook
The company reaffirms its fiscal 2015 earnings forecast of $8.50
to $9.00 per diluted share. The outlook assumes continued moderate
economic growth and a modest net benefit from fuel. The capital
spending forecast for fiscal 2015 remains $4.2 billion.
Fuel Surcharges
FedEx regularly reviews its fuel surcharge tables and will
update certain tables at FedEx Express, FedEx Ground and FedEx
Freight effective February 2, 2015. Details on these changes will
be available on fedex.com by December 23, 2014.
FedEx Express Segment
For the second quarter, the FedEx Express segment reported:
• Revenue of $7.02 billion, up 3% from last
year’s $6.84 billion
• Operating income of $484 million, up 36%
from $357 million a year ago
• Operating margin of 6.9%, up from 5.2% the
previous year
Revenue increased due to higher U.S. domestic package volume and
international export package base revenue, partially offset by
lower fuel surcharges and exchange rates. U.S. domestic package
volume grew by 7%, including a 10% increase in U.S. overnight box.
U.S. domestic revenue per package declined 2% due to decreased fuel
surcharges and lower weight.
FedEx International Economy® volume grew 5%, while FedEx
International Priority® volume increased 1%. International export
revenue per package was flat, as higher rates were offset by
unfavorable currency exchange and lower fuel surcharges.
Operating results improved due primarily to U.S. domestic and
international export package revenue growth, cost management
related to profit improvement programs, lower pension expense and a
slight net benefit from fuel. These improvements were partially
offset by the timing of higher aircraft maintenance expense. The
year over year increase in aircraft maintenance expense is expected
to subside beginning in the fourth fiscal quarter.
FedEx Ground Segment
For the second quarter, the FedEx Ground segment reported:
• Revenue of $3.06 billion, up 8% from last
year’s $2.85 billion
• Operating income of $465 million, up 6%
from $439 million a year ago
• Operating margin of 15.2%, down from 15.4%
the previous year
FedEx Ground average daily volume grew 5% in the second quarter,
driven by growth in both business-to-business and FedEx Home
Delivery services. Revenue per package increased 3% due to rate
increases and higher residential surcharges. FedEx SmartPost
average daily volume decreased 4% due to the reduction in volume of
a major customer. FedEx SmartPost revenue per package increased 7%
due to rate increases and improved customer mix, partially offset
by higher postage rates.
Operating income increased due to higher revenue per package and
volume, partially offset by higher network expansion costs, as the
company continues to heavily invest in the FedEx Ground and FedEx
SmartPost businesses.
FedEx Freight Segment
For the second quarter, the FedEx Freight segment reported:
• Revenue of $1.59 billion, up 11% from last
year’s $1.43 billion
• Operating income of $112 million, up 35%
from $83 million a year ago
• Operating margin of 7.1%, up from 5.8% the
previous year
Less-than-truckload (LTL) average daily shipments increased 8%,
including a 10% increase in demand for Priority service. LTL
revenue per shipment grew 3% due to higher weight per shipment,
higher rates and increased fuel surcharges.
Operating results improved due to increased LTL revenue per
shipment and higher average daily LTL shipments.
Corporate Overview
FedEx Corp. (NYSE: FDX) provides customers and businesses
worldwide with a broad portfolio of transportation, e-commerce and
business services. With annual revenues of $47 billion, the company
offers integrated business applications through operating companies
competing collectively and managed collaboratively, under the
respected FedEx brand. Consistently ranked among the world's most
admired and trusted employers, FedEx inspires its more than 300,000
team members to remain "absolutely, positively" focused on safety,
the highest ethical and professional standards and the needs of
their customers and communities. For more information, visit
news.fedex.com.
Additional information and operating data are contained in the
company’s annual report, Form 10-K, Form 10-Qs and second quarter
fiscal 2015 Statistical Book. These materials, as well as a webcast
of the earnings release conference call to be held at 8:30 a.m. EST
on December 17 are available on the company’s website at
investors.fedex.com. A replay of the
conference call webcast will be posted on our website following the
call.
Certain statements in this press release may be considered
forward-looking statements, such as statements relating to
management's views with respect to future events and financial
performance. Such forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results to
differ materially from historical experience or from future results
expressed or implied by such forward-looking statements. Potential
risks and uncertainties include, but are not limited to, economic
conditions in the global markets in which we operate, our ability
to execute on our profit improvement programs, legal challenges or
changes related to FedEx Ground’s owner-operators, new U.S.
domestic or international government regulation, the impact from
any terrorist activities or international conflicts, our ability to
effectively operate, integrate and leverage acquired businesses,
changes in fuel prices and currency exchange rates, our ability to
match capacity to shifting volume levels and other factors which
can be found in FedEx Corp.'s and its subsidiaries' press releases
and filings with the SEC.
The financial section of this release is
provided on the company's website at investors.fedex.com.
FedEx Corp.Media Contact:Jess Bunn, 901-818-7463orInvestor
Contact:Mickey Foster, 901-818-7468Home Page: fedex.com
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