FedEx Fiscal Second-Quarter Net Income Increases
FedEx Corp. net income in the second quarter of its 2016 fiscal year rose 4% to $693 million, or $2.44 per share, including one-time effects, driven by 26% higher profits at Express and 13% better results at its Ground unit.
Revenue increased 4% to $12.45 billion, spurred by a $987 million increase at FedEx Ground that resulted from a combination of business growth and revenue from the acquisition of Genco, a logisitics company. Revenue declined 6% at FedEx Express.
The announcement by FedEx also said that when charges and gains in both the 2016 and 2015 quarters were excluded, earnings increased about 20% to $729 million.
“FedEx Corp. posted solid earnings despite continued weakness in industrial production and global trade, and we are making impressive progress toward our goals to increase margins, earnings per share, cash flows and returns on invested capital,” Chairman and CEO Frederick Smith said of the company that ranks No. 2 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers. “A record number of holiday shipments — fueled by the steady rise of e-commerce — are flowing through the FedEx global networks.”
The second-quarter profit before interest and taxes rose to $622 million at Express, with help from cost reductions and rate increases. At Ground, e-commerce drove a combination of higher rates and a 9% rise in shipments.
FedEx Freight revenue dipped 2%, and profit before interest and taxes fell 10% to $101 million from $112 million.
The 2016 quarter was hurt by 14 cents per share in costs for litigation and acquisitions. The 2015 results were affected by changes in pension accounting.
Over the longer term, the Memphis, Tennessee-based company maintained its 2016 full-year profit at between $10.40 to $11 per share.
