FedEx Income Rises 12.7% in First Quarter
FedEx Corp. reported net income rose 12.7%, excluding one-time costs, for the first quarter of its fiscal year 2017 calendar compared with the same period last year, the company announced Sept. 20.
The earnings, excluding charges, were $780 million, or $2.90 per share, in the period that ended on Aug. 31. But costs related to the acquisition of Dutch firm TNT Express, completed in May 2016, drove down the adjusted net earnings to $715 million, or $2.65, which is a 3.3% increase year-over-year.
“The integration of TNT Express is proceeding smoothly, and the level of team members’ engagement is outstanding,” said CEO Frederick W. Smith. “Managing our operating companies as a portfolio of customer solutions helped FedEx achieve strong financial and operating results in the quarter, especially given the global economy’s continued low growth.”
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Revenue at FedEx rose to $14.7 billion from $12.3 billion or a 20% jump year-over-year, including a $1.8 billion contribution from TNT Express and a $460 million increase, or 12%, from the FedEx Ground segment. Express revenue was $6.7 billion, only a 1% increase. Freight revenue rose $57 million, or a 4% increase year-over-year. Earnings before tax and interest rose to $1.26 billion, up 10% from the $1.14 billion it reported a year ago, although TNT posted a $14 million operating loss in the category.
Otherwise, the operating income at FedEx Express, Ground and Freight all increased year-over-year. Express reported $624 million and Ground $610 million in operating revenue, both 14% jumps. FedEx Freight increased only $3 million to $135 million in operating income, or 2% coming to the same period in 2015.
FedEx announced it’ll hire more than 50,000 seasonal employees for the holidays. UPS recently announced it’ll hire 95,000 seasonal employees.
The freight unit reported average daily less-than-truckload shipments grew 8%, which offset drops in the revenue and weight per shipment between 3 and 4%. Average daily package volume at FedEx Ground increased 10% for the first quarter, while Express reported a 1% increase in both the United States and internationally.
FedEx beat earnings by 10 cents per share, according a Bloomberg News survey of analysts’ estimates. The company also beat forecasts on adjusted net income and met forecasts on revenue and operating income.
Meanwhile the Memphis, Tennessee, carrier announced it’ll hire 50,000 seasonal employees for the upcoming holiday season. Rival UPS announced on Sept. 14 that it plans to hire about 95,000 seasonal employees to handle the additional packages sent in November and December.
Memphis, Tennessee-based FedEx ranks No. 2 on the Transport Topics Top 100 list of the largest for-hire carriers in the United States and Canada.
