FedEx Profits Rise 65%
FedEx Corp. reported profits grew year-over-year, increasing 65% over the last 12 months and easily beating the Bloomberg News consensus forecast on both an annual and quarterly basis.
In the fiscal fourth quarter, FedEx generated $1 billion in net income or $3.75 per share compared with a $70 million loss or 26 cents one year ago. However, the results from 2016 included a mark-to-market pension adjustment and a tax impact related to the TNT Express purchase that affected bottom-line results.
The Memphis, Tenn., carrier earned $3 billion in profits for the full fiscal year ending May 31, or $11.07. In fiscal year 2016, FedEx earned $1.82 billion or $6.51.
Revenue for the full fiscal year rose 20% to $60.3 billion and increased 21% to $15.7 billion in the last three months.
“Strong fourth-quarter results completed a record fiscal 2017,” FedEx Chairman and CEO Fred Smith said. “We enter fiscal 2018 confident FedEx Corp. will continue to deliver outstanding value and opportunities for shareowners, customers and team members for years to come.”
FedEx Express revenue jumped 7% to $7.2 billion due to a 5% increase in international exports and higher prices, according to the company. Operating income, or the amount after expenses were deducted, rose 14% to $863 million for the quarter.
FedEx Ground revenue increased 9% to $4.7 billion in the fiscal fourth quarter compared with a year ago and operating income grew 7% to $702 million. The company said average daily package volume grew 3% year-over-year on top of higher prices.
But the FedEx Freight division produced mixed results with revenue up 6% to $1.7 billion but operating income falling 3% to $133 million. FedEx said that average daily shipments were flat compared with a year ago, but it paid out higher wages and spent more on information technology.
The TNT Express division generated $1.9 billion in revenue and $26 million in operating income in the fourth quarter, but doesn’t have a year ago comparison.
For the full fiscal year, revenue grew between 2% and 9% in each division. Operating income rose 6% to $2.7 billion at FedEx Express, 1% to $2.3 billion at FedEx Ground, but dropped 7% to $397 million at FedEx Freight.
Average pounds per freight shipment remain unchanged for the full fiscal year but dropped 9% in the fourth quarter in the United States. Revenue per pound of freight grew 2% for the full year and 3% in the fourth quarter due to higher rates.
Less-than-truckload shipments per day grew 3% for the full fiscal year but remained unchanged in the fourth quarter on a year-over-year basis. For the full year, revenue grew 1% per shipment and 3% per 100 pounds of freight. For the final quarter, the both revenue metrics grew 6% compared with a year ago.
FedEx Corp., which ranks No 2 on the Transport Topics Top 100 list of the largest North American for-hire carriers, came out four cents ahead of the consensus estimate in the quarter and three cents for the full year.
