FedEx’s 1Q Income Jumps; Company Will Combine Freight, LTL Units In January
FedEx Corp.’s first-quarter earnings more than doubled and the company said it will combine its freight and less-than-truckload units in January.
Merging its FedEx Freight and FedEx National LTL units will result in the elimination of 1,700 jobs and the closure of about 100 facilities, the company said. The move will be effective Jan. 30.
“This change, along with the company’s ongoing yield management initiatives, is expected to substantially improve the profitability of the FedEx Freight segment in fiscal 2012,” FedEx said in a statement.
Net income for quarter ended Aug. 31 was $380 million, or $1.20 a share, up from $181 million, or 58 cents, a year ago. Revenue rose 18% to $9.46 billion.
FedEx Freight reported an operating loss of $16 million for the quarter, compared with operating income of $2 million a year ago. Revenue rose 28% to $1.26 billion, as average daily LTL shipments improved 29%.
The FedEx Ground segment’s operating income rose 37% to $287 million, while revenue gained 13%, to $1.96 billion. Average daily package volume rose 7%.
The FedEx Express unit’s operating income jumped 243% to $357 million, while revenue rose 20% to $5.91 billion. Average daily package volume rose by 19%, led by exports from Asia.
The company said its second-quarter earnings will be $1.15 to $1.35 per share, and boosted its full-year earnings outlook to a range of $4.80 to $5.25 per share, up from a previously estimated $4.60 to $5.20 per share.
FedEx Corp. is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
