FedEx Earnings Rise to $897 Million
Improved profitability at the Express and Ground units helped FedEx Corp. increase fiscal fourth-quarter net income, excluding one-time costs, by 20% to $897 million, or $3.30 per share excluding one-time costs.
Revenue rose 7% to $13 billion. In the year-earlier period ending May 31, net income was $753 million, or $2.66 per share.
“We had a great quarter,” Chief Financial Officer Alan Graf said on a conference, citing the Express unit as “the most valuable player in the quarter.” Earnings before interest and taxes at the package and airfreight unit more than doubled, to $757 million from $322 million, although revenue was little changed because pricing improved and costs were reduced through an ongoing profit-improvement program.
The Ground unit’s operating income rose 9% to $656 million as revenue climbed 20%, due in part to changing how SmartPost revenue was counted and in part to higher volume and rates.
FedEx Freight operating income was unchanged at $137 million, though revenue rose 2% to $1.61 billion. Profits were hurt by higher pay and benefits.
The company’s forecast for its current fiscal year was $11.75 to $12.25 per share, up from $10.80 in the fiscal year just concluded.
The company’s earnings including a series of adjustments such as pension accounting was a $70 million loss, or 26 cents per share, an improvement over the loss including pension and other one-time costs of $895 million or $3.16 per share, in the prior-year period.
Pension costs in the quarter just ended reduced earnings by $3.47 per share, while costs and gains related to the acquisition of TNT, the Dutch package and freight carrier, shaved 6 cents from earnings.
Graf also said there won’t be additional earnings from operations at TNT until its 2018 fiscal year.
FedEx ranks No. 2 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
