FedEx Net Income Climbs 53% as Profit Rises at Every Unit
FedEx Corp. improved fiscal third-quarter net income by 53% to $580 million, or $2.01 per share, fueled by earnings gains across the Express, Ground and Freight units.
Revenue rose 4% in the quarter ended Feb. 28 to $11.7 billion. In the year-earlier period, net income was $378 million, or $1.23 per share.
“We had a very successful peak season as volumes grew across all transportation segments, and our profit-improvement programs are moving ahead as scheduled,” CEO Frederick Smith said in a statement.
During a conference call, Smith said he believed “there is a good chance” that Congress will include the use of 33-foot trailers for package delivery as part of a highway bill this year. Smith, who noted the 18% productivity improvement over the current 28-foot units, said that step would be “the biggest single thing” that could be done to improve logistics productivity.
The longer trailers also will provide additional benefits, such as improving safety and reducing fuel use, he said.
The Ground unit raised revenue and profit before interest and taxes by 14%. Profits rose to $558 million from $490 million, and revenue increased to $3.39 billion.
Freight nearly doubled profit before interest and taxes to $68 million as revenue rose 6% to $1.43 billion.
Express, the package and freight unit with the largest revenue, more than doubled profit before interest and taxes to $384 million. Revenue was flat at $6.66 billion.
The company, which ranks No. 2 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers, also announced that it is on track to report record earnings in this quarter and for its fiscal year.
