FedEx’s 2Q Profit Jumps on Higher Deliveries
FedEx Corp.’s fiscal second-quarter profit nearly doubled, boosted by higher holiday-season sales, and the company said it will purchase 27 new jets for its FedEx Express service in the next few years.
Net income rose to $497 million, or $1.57 per share, from $283 million, or 89 cents, a year ago. The results were in the high end of its projected range of $1.40 to $1.60 per share.
Revenue for the quarter ended Nov. 30 rose 10% to $10.59 billion, FedEx said Thursday.
“Our improved performance was largely a result of effective yield management programs and strong demand for FedEx Home Delivery and FedEx SmartPost services,” said FedEx Chairman and CEO Frederick Smith.
“With the healthy growth in online shopping this holiday season, demand is increasing for these residential delivery services,” he said in a statement.
FedEx also said it signed an agreement with Boeing Co. to purchase 27 new 767-300F aircraft, three of which will arrive in fiscal year 2014 and six more per year in fiscal years 2015 to 2018.
The 767s will replace FedEx Express’s MD10 aircraft, some of which are more than 40 years old, the company said.
Less-than-truckload unit FedEx Freight posted operating income of $40 million, compared with an operating loss of $91 million a year ago. Revenue rose 9% to $1.33 billion. LTL yield rose 8%, though average daily shipments slipped 3%.
FedEx Express’ operating income gained 30% to $342 million, while revenue rose 10% to $6.58 billion. Domestic revenue per package rose 12% while average daily package volume slipped 4%.
FedEx Ground’s operating income jumped 34% to $398 million, while revenue improved 13% to $2.34 billion. Average daily package volume rose 4%.
FedEx projected third-quarter earnings of $1.25 to $1.45 per share and confirmed its full-year outlook of $6.25 to $6.75 per share.
FedEx Corp. is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.
