Category Archives: FedEx Express

FedEx Corporation fourth quarter earnings miss Wall Street estimates

FedEx Corporation (FedEx Express) (Memphis) today (June 17) reported reported a fiscal fourth quarter net profit of $753 million or $2.66 per share, unchanged from $753 million or $2.54 per share for the same quarter a year ago.

Analysts on Wall Street had expected the company to report quarterly adjusted earnings per share of $2.68 per share with revenue of $12.31 billion, according to consensus estimates from Thomson Reuters and CNBC.

Without adjustments, FedEx reported a loss of $3.16 per diluted share ($895 million) for the fourth quarter compared to a profit of $2.62 per diluted share a year ago, and earnings of $3.65 per diluted share for the full fiscal year, compared to $7.48 per diluted share last year.

For the year, the company reported a net profit of $1.05 billion, or $3.65 per share. Revenue was reported as $47.45 billion.

Here is the report by the company:

FedEx Corporation logo

FedEx Corporation reported adjusted earnings of $2.66 per diluted share for the fourth quarter ended May 31, compared to adjusted earnings of $2.54 per diluted share a year ago. For fiscal 2015, adjusted earnings were $8.95 per diluted share, compared to $7.05 per diluted share a year ago. Without adjustments, FedEx reported a loss of $3.16 per diluted share for the fourth quarter compared to a profit of $2.62 per diluted share a year ago, and earnings of $3.65 per diluted share for the full fiscal year, compared to $7.48 per diluted share last year.

FedEx 4Q and F2015 Results

Quarterly consolidated earnings have been adjusted for previously announced changes in pension accounting ($4.88 per diluted share), aircraft impairments ($0.62 per diluted share), a legal reserve increase ($0.47 per diluted share) and changes in segment reporting (favorable $0.15 per diluted share).

“Fiscal 2015 was a transformative year for FedEx with outstanding financial results driving expanded long-term value for shareowners,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “Significant acquisitions announced in the year promise to strengthen our portfolio of services and change what’s possible for customers. I am very proud of the FedEx team for its accomplishments and look forward to a successful fiscal 2016.”

Adjusted operating income improved 5% during the quarter, due to base yield growth in all three transportation segments, higher ground and U.S. domestic express volume, and benefits from profit improvement program initiatives. These improvements offset increased employee variable incentive compensation and unfavorable net impacts from fuel and weather.

Outlook

For fiscal 2016, FedEx projects adjusted earnings to be $10.60 to $11.10 per diluted share before year-end mark-to-market pension accounting adjustments, driven by continued improvement in base pricing and benefits from our profit improvement program. The outlook assumes continued moderate economic growth and does not include any operating results or costs related to TNT Express.

Capital spending for fiscal 2016 is expected to be approximately $4.6 billion, which includes expansion of the FedEx Ground network and planned aircraft deliveries to support the FedEx Express fleet modernization program.

“Our operating performance significantly improved in fiscal 2015 as we focused on revenue quality and executed on our profit improvement program initiatives,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “We expect strong earnings growth in fiscal 2016 as we continue to focus on improving performance and successfully executing our profit improvement initiatives.”

FedEx Express Segment

During the fourth quarter, FedEx Express permanently retired 15 aircraft and 21 related engines, and adjusted the retirement schedule of an additional 23 aircraft and 57 engines. These actions resulted in $276 million of impairment and related charges, of which $246 million was noncash. These charges are excluded from this year’s adjusted operating income and margin.

Revenue decreased 4% as lower fuel surcharges and unfavorable currency exchange rates more than offset base yield and volume growth. U.S. domestic package volume grew 2%, driven by a 3% increase in overnight box. U.S. domestic revenue per package declined 4%, with lower fuel surcharges offsetting improved base rates. International export volume was down 1%, as FedEx International Economy grew 3% while FedEx International Priority® declined 2%. International export revenue per package decreased 8%, as lower fuel surcharges and unfavorable currency exchange rates more than offset higher base rates.

Adjusted segment operating results improved due to higher base yield and U.S. domestic volume growth, the benefit from profit improvement program initiatives and lower international expenses due to currency exchange rates. These benefits were partially offset by an unfavorable net fuel impact, higher incentive compensation and a negative impact from weather.

Copyright Photo: Fred Freketic/AirlinersGallery.com. As previously reported, FedEx is permanently retiring early 15 aircraft, including three Airbus A300s, four Airbus A310-300s, one McDonnell Douglas MD-10-10 and seven McDonnell Douglas MD-11Fs. Updated McDonnell Douglas MD-10-10F (DC-10-10F) N385FE (msn 46619) is pictured in action at JFK International Airport in New York.

FedEx Express aircraft slide show: AG Airline Slide Show

AG Each photo carefully selected

 

FedEx Express early retires 15 aircraft, adjusts the retirement schedule for 23 additional older aircraft

FedEx Corporation (FedEx Express) (Memphis) has announced it has permanently retired 15 aircraft and 21 related engines as it continues to rationalize capacity and modernize its aircraft fleet to more effectively serve FedEx Express customers.

The company continued;

FedEx Express logo (large)

The permanent retirement of aircraft and related engines includes:

Seven McDonnell MD-11F airframes and 12 related engines;

Three Airbus A300 airframes and three related engines;

Four Airbus A310-300 airframes and three related engines; and

One McDonnell Douglas MD10-10 airframe and three related engines.

The impact of retiring these aircraft, engines and related parts resulted in a non-cash impairment charge of $246 million recorded in May 2015.

FedEx has also adjusted the retirement schedule of an additional 23 airframes and 57 engines.

FedEx also recognized in May 2015 $30 million in cash charges associated with these actions.

These combined retirement changes will not have a material impact on near-term depreciation expense.

FedEx Express fleet as of February 28, 2015:

FedEx Express Fleet 2.28.15

Notes:

1 – February 28, 2015 Boeing 757 count includes 21 aircraft that are not currently in operation, 5 of which are in the modification process and 16 of which are awaiting modification.

2 – As of February 28, 2015 Boeing 767 count includes 3 aircraft that are not in operation and are in the modification process. As of February 28, 2015, FedEx is committed to purchase 44 B767Fs. Aircraft to be delivered statistics include certain lease additions and expirations.

3 – As of February 28, 2015, FedEx is committed to purchase 18 Boeing 777Fs.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Seven MD-11Fs were retired. McDonnell Douglas MD-11 (F) N595FE (msn 48553) climbs away from Anchorage.

FedEx Express aircraft slide show: AG Airline Slide Show

FedEx Corporation to acquire TNT Express for $4.8 billion

FedEx Corporation (FedEx Express) (Memphis) has announced its intention to acquire its European rival TNT Express (TNT Airways) (Amsterdam) in an all-cash public offer with a stated public value of $4.8 billion. FedEx is offering a 33 percent premium in its price offering for the stock of TNT. The combined European headquarters will be Amsterdam. TNT’s Liege cargo hub will be maintained.

The two companies issued this joint statement:

FedEx Corporation logo

TNT Express logo

 

Transaction highlights:

FedEx Corporation (FedEx) and TNT Express N.V. (TNT Express) reached conditional agreement on recommended all-cash public offer of €8.00 per ordinary TNT Express share.

The Offer Price represents a premium of 33% over the closing price of 2 April 2015 and a premium of 42% over the average volume weighted price per TNT Express share of €5.63 over the last 3 calendar months.

The transaction represents an implied equity value for TNT Express of €4.4 billion ($4.8 billion).

Transaction unanimously recommended and supported by TNT Express’ Executive Board and Supervisory Board.

High level of deal certainty.

PostNL N.V. has irrevocably confirmed to support the Offer and tender its 14.7% TNT Express shareholding.

Combination will transform FedEx’s European capabilities and accelerate global growth.

Customers will enjoy access to an enhanced, integrated global network, combining TNT Express strong European capabilities and FedEx’s strength in other regions globally, including North America and Asia.

FedEx and TNT Express employees share a commitment to serving customers and delivering value for shareholders and supporting the communities they live and work in.

The parties have agreed to certain non-financial covenants including:

Existing employment terms of TNT Express will be respected.

The European regional headquarters of the combined companies will be in Amsterdam/Hoofddorp.

TNT Express hub in Liege will be maintained as a significant operation for the group going forward.

TNT Express’ airline operations will be divested, in compliance with applicable airline ownership regulations.

FedEx and TNT Express anticipate that the Offer will close in the first half of calendar year 2016.

FedEx and TNT Express are confident that anti-trust concerns, if any, can be addressed adequately in a timely fashion.

Top Copyright Photo: Paul Bannwarth/AirlinersGallery.com. FedEx Express Boeing 757-204 (F) N923FD (msn 26266) departs from EuroAirport serving Basel/Mulhouse/Freiburg.

FedEx Express aircraft slide show: AG Airline Slide Show

TNT aircraft slide show: AG Airline Slide Show

Bottom Copyright Photo: Bernhard Ross/AirlinersGallery.com. TNT Airways Boeing 737-4M0 (F) OE-IAT (msn 29210) taxies to the runway at Frankfurt.

FedEx Corporation reports net income of $580 million, up 53%, for the 3Q

FedEx Corporation (FedEx Express) (Memphis) reported earnings of $2.01 per diluted share for the third quarter ended February 28, compared to $1.23 per share last year.

Third Quarter Results

FedEx Corp. reported the following consolidated results for the third quarter:

• Revenue of $11.7 billion, up 4% from $11.3 billion the previous year

• Operating income of $962 million, up 50% from $641 million last year

• Operating margin of 8.2%, up from 5.7% the previous year

• Net income of $580 million, up 53% from last year’s $378 million

Operating results improved due to volume and base yield growth in all three transportation segments, a significant net benefit from fuel, benefits from profit improvement program initiatives, a lower year-over-year weather impact and reduced pension expense. These improvements were partially offset by higher variable incentive compensation accruals.

Share repurchases had a $0.11 year-over-year positive impact on third quarter earnings per diluted share.

Outlook

FedEx projects earnings to be $8.80 to $8.95 per diluted share for fiscal 2015. This outlook assumes continued moderate global economic growth. The capital spending forecast for fiscal 2015 remains $4.2 billion.

“We expect continued revenue and earnings growth this year, driven by ongoing improvements in all of our transportation segments,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Variable incentive compensation accruals will continue to increase as our financial performance improves, and we expect to deliver record fourth quarter and fiscal year earnings.”

FedEx Express Segment

For the third quarter, the FedEx Express segment reported:

• Revenue of $6.66 billion, compared to last year’s $6.67 billion

• Operating income of $384 million, up 129% from $168 million a year ago

• Operating margin of 5.8%, up from 2.5% the previous year

Revenue was essentially flat, as lower fuel surcharges and unfavorable currency exchange rates more than offset volume and base yield growth. U.S. domestic package volume grew by 4%, including 5% growth in overnight box. U.S. domestic revenue per package decreased 2% due to lower fuel surcharges, partially offset by higher base rates. FedEx International Economy volume grew 4%, while FedEx International Priority volume was flat. International export revenue per package decreased 4%, as lower fuel surcharges and unfavorable currency exchange rates were partially offset by favorable service mix and higher rates.

Operating results were higher as increased base revenue, a significant net benefit from fuel and a lower year-over-year weather impact all contributed to the quarter. In addition, the company continued to benefit from profit improvement program initiatives. Partially offsetting these favorable factors were increased variable incentive compensation accruals and aircraft maintenance expenses.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. FedEx Express McDonnell Douglas MD-10-10F (DC-10-10F) N389FE (msn 46623) climbs away from Los Angeles International Airport.

FedEx Express aircraft slide show: AG Airline Slide Show

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FedEx Corporation reports net income of $616 million, up 23% from last year’s $500 million

FedEx Corporation (FedEx Express) (Memphis) reported earnings of $2.14 per diluted share for its fiscal second quarter ended November 30, up 36% from last year’s $1.57 per share. The corporation reported net income of $616 million, up 23% from last year’s $500 million. However the corporation missed several analyst profit estimates despite declining fuel costs.

The company issued this statement:

“FedEx posted strong results and a higher operating margin in the second quarter, with continued growth in volumes and base yields in each of our transportation segments”

“FedEx posted strong results and a higher operating margin in the second quarter, with continued growth in volumes and base yields in each of our transportation segments,” said Frederick W. Smith, FedEx Corporation chairman, president and chief executive officer. “We are in the final stages of this year’s peak shipping season, and I’d like to thank the more than 300,000 dedicated team members around the world for once again delivering outstanding service to our customers during the holidays.”

Second Quarter Results

FedEx Corp. reported the following consolidated results for the second quarter:

• Revenue of $11.9 billion, up 5% from $11.4 billion the previous year

• Operating income of $1.01 billion, up 22% from $827 million last year

• Operating margin of 8.5%, up from 7.3% a year ago

• Net income of $616 million, up 23% from last year’s $500 million

Operating income and margin increased primarily due to higher volumes and base yields in all three transportation segments. Results in the second quarter also included benefits from the company’s profit improvement programs, lower pension expense and a slightly positive net impact from fuel. These benefits were partially offset by higher aircraft maintenance expense due to the timing of aircraft maintenance events.

Share repurchases benefited second quarter earnings by $0.16 per diluted share.

Outlook

The company reaffirms its fiscal 2015 earnings forecast of $8.50 to $9.00 per diluted share. The outlook assumes continued moderate economic growth and a modest net benefit from fuel. The capital spending forecast for fiscal 2015 remains $4.2 billion.

Fuel Surcharges

FedEx regularly reviews its fuel surcharge tables and will update certain tables at FedEx Express, FedEx Ground and FedEx Freight effective February 2, 2015. Details on these changes will be available on fedex.com by December 23, 2014.

FedEx Express Segment

For the second quarter, the FedEx Express segment reported:

• Revenue of $7.02 billion, up 3% from last year’s $6.84 billion

• Operating income of $484 million, up 36% from $357 million a year ago

• Operating margin of 6.9%, up from 5.2% the previous year

Revenue increased due to higher U.S. domestic package volume and international export package base revenue, partially offset by lower fuel surcharges and exchange rates. U.S. domestic package volume grew by 7%, including a 10% increase in U.S. overnight box. U.S. domestic revenue per package declined 2% due to decreased fuel surcharges and lower weight.

FedEx International Economy® volume grew 5%, while FedEx International Priority® volume increased 1%. International export revenue per package was flat, as higher rates were offset by unfavorable currency exchange and lower fuel surcharges.

Operating results improved due primarily to U.S. domestic and international export package revenue growth, cost management related to profit improvement programs, lower pension expense and a slight net benefit from fuel. These improvements were partially offset by the timing of higher aircraft maintenance expense. The year over year increase in aircraft maintenance expense is expected to subside beginning in the fourth fiscal quarter.

FedEx Ground Segment

For the second quarter, the FedEx Ground segment reported:

• Revenue of $3.06 billion, up 8% from last year’s $2.85 billion

• Operating income of $465 million, up 6% from $439 million a year ago

• Operating margin of 15.2%, down from 15.4% the previous year

FedEx Ground average daily volume grew 5% in the second quarter, driven by growth in both business-to-business and FedEx Home Delivery services. Revenue per package increased 3% due to rate increases and higher residential surcharges. FedEx SmartPost average daily volume decreased 4% due to the reduction in volume of a major customer. FedEx SmartPost revenue per package increased 7% due to rate increases and improved customer mix, partially offset by higher postage rates.

Operating income increased due to higher revenue per package and volume, partially offset by higher network expansion costs, as the company continues to heavily invest in the FedEx Ground and FedEx SmartPost businesses.

FedEx Freight Segment

For the second quarter, the FedEx Freight segment reported:

• Revenue of $1.59 billion, up 11% from last year’s $1.43 billion

• Operating income of $112 million, up 35% from $83 million a year ago

• Operating margin of 7.1%, up from 5.8% the previous year

Less-than-truckload (LTL) average daily shipments increased 8%, including a 10% increase in demand for Priority service. LTL revenue per shipment grew 3% due to higher weight per shipment, higher rates and increased fuel surcharges.

Operating results improved due to increased LTL revenue per shipment and higher average daily LTL shipments.

Copyright Photo: Jay Selman/AirlinersGallery.com. Monday, December 15, was the busiest day for FedEx in its history according to the company. Cutting through the early morning mist at Charlotte is Airbus A300B4-622R (F) N719FD (msn 388) bound for the Memphis cargo hub.

FedEx Express aircraft slide show:

 

LAN Airlines to lease three Boeing 767-300F freighters to FedEx Express

LAN Airlines (Chile) (Santiago) is leasing three Boeing 767-300F freighters to FedEx Express (Memphis) for three years. LAN currently has excess freighter capacity.

Copyright Photo: Alvaro Romero/AirlinersGallery.com. Boeing 767-316F ER CC-CZZ (msn 25756) arrives at the Santiago base.

LAN Airlines aircraft slide show: AG Slide Show

FedEx Express requests NMB mediation for a new pilots contract

FedEx Express (Memphis), a subsidiary of FedEx Corporation (Memphis), has formally requested assistance from the National Mediation Board (NMB) to expedite its ongoing pilot negotiations. The NMB is the U.S. governmental agency that oversees labor agreements for entities covered by the Railway Labor Act (RLA), such as airlines, railroads and express companies.

The company and its pilots, who are represented by the Air Line Pilots Association (ALPA), have been engaged in contract talks for more than a year. The current contract became amendable on February 25, 2013 and the two sides reached a tentative agreement on 20 of the 31 contract sections in September 2014.

Under the RLA, the terms and conditions of the existing contract between the company and ALPA do not expire until the full multi-step RLA process is exhausted. In the meantime, the progression of negotiations into the mediation stage has no impact on company operations or its ability to provide highly reliable service to customers.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-FS2 N862FD (msn 37733) arrives on a cold day at Anchorage.

FedEx Express Aircraft Slide Show: AG Slide Show