Tag Archives: FedEx Express

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

 

FedEx Express increases the number of countries for its International First® early delivery service to 97

FedEx is expanding solutions for global customers who need their critical deliveries to arrive as early as the start of the next business day.

FedEx Express (Memphis), a subsidiary of FedEx Corporation, and the world’s largest express transportation company, is broadening the FedEx ‘International First®’ early delivery service, increasing the number of origin markets to include the following:

Austria

Bahrain

Belize

Bolivia

China

Czech Republic

Denmark

Ecuador

El Salvador

Finland

Guiana (Guyana)

Guyana

Honduras

Hungary

India

Indonesia

Korea

Kuwait

Malaysia

Nicaragua

Norway

Paraguay

Peru

Philippines

Portugal

Poland

Singapore

Suriname (Surinam)

Sweden

Thailand

United Arab Emirates

This expansion brings the total number of origin markets to 97, and means that customers can now use FedEx International First to ship packages from the above countries to any of the existing International First destination markets.

Depending on origin and destination, FedEx International First shipments arrive within one to three business days, often at the start of the business day. The service is most often used for business documents, electronic and high tech equipment, medical devices, clinical trials and gear for the entertainment industry–shipments that require delivery on a tight deadline.

About FedEx International First

FedEx International First is a time-definite, customs cleared, door-to-door express service with a pre-defined delivery commitment for shipments up to 150 lbs. per package. Customers receive International First deliveries as early as 8 a.m. in the United States, 9 a.m. in Europe, and 10 a.m. in Asia, Canada and Latin America. While the range of shipments is broad, it’s often the delivery service of choice for customers shipping time-sensitive materials.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. McDonnell Douglas MD-11 (F) N644FE (msn 48444) lands in Anchorage.

FedEx Express: AG Slide Show

FedEx is forecasting another record holiday season with an 8.8% increase and December 15 as the busiest day

FedEx Corporation (FedEx Express) (Memphis) is forecasting another record holiday. The company expects to move more than 290 million shipments between Black Friday and Christmas Eve, an 8.8 percent increase in overall year-over-year Peak seasonal volume.

The season is expected to be bolstered by three volume spikes throughout December, occurring the first three Mondays of the month and each expected to surpass 20 million in volume.

December 15 is projected to be the busiest day in company history, with a forecasted 22.6 million shipments moving around the world. Peak projections are included in FedEx earnings guidance for FY15.

Copyright Photo: Ken Petersen/AirlinersGallery.com. An upgraded McDonnell Douglas MD-10-30F (DC-10-30F) registered as N321FE (msn 47836) arrives in Las Vegas.

FedEx Express Aircraft Slide Show: AG Slide Show

 

FedEx pilots to conduct informational picketing today

FedEx Express‘ (Memphis) 4,200 pilots, represented by the Air Line Pilots Association, Int’l (ALPA), will conduct informational picketing on Tuesday, September 23, in three cities to show, according to the union, “their continuing frustration with ongoing contract negotiations and their resolute support of their Negotiating Committee.”

Informational picketing will take place on Tuesday, September 23, at the following locations and times (all times are local):

Anchorage
Outside FedEx sorting facility at Ted Stevens
Anchorage Int’l Airport, corner of Postmark
Drive and Rockwell Avenue
11:00 a.m. to 11:45 a.m.

Los Angeles
Maguire Gardens (South Flower Street and
West 5th Street)
11:00 a.m. to 11:45 a.m.

Memphis
Outside FedEx Air Operations Center (3131
Democrat Road)
Noon to 12:30 p.m.

According to the union, “FedEx Express and its pilot group came to a historic collective bargaining agreement in 2011. What made this agreement historic was the commitment to continue bargaining so as to foster a more efficient negotiating climate when formal negotiations commenced in 2013 despite having achieved a contract. “There was a real opportunity to fix some difficult problems with well-developed long-term solutions and without the pressure that comes with traditional bargaining. Unfortunately, management chose a different route,” said Captain Scott Stratton, chairman of the ALPA FedEx Master Executive Council. “We should have had a new contract by now, but instead we have spent too much time mired in a ‘traditional’ bargaining situation that does not promote good labor-management relations. In spite of management’s actions, the pilots remain committed to achieving a responsible negotiated agreement that recognizes our contributions to FedEx’s remarkable profitability.”

Copyright Photo: Ken Petersen/AirlinersGallery.com. McDonnell Douglas MD-10-10F (DC-10-10F) N554FE (msn 46708) lands at Raleigh/Durham.

FedEx Express: AG Slide Show

FedEx Corporation’s earnings surge in the first quarter to $606 million

FedEx Corporation (FedEx Express) (Memphis) reported its earnings for its fiscal first quarter surged by 24 percent to net income of $606 million. The corporation issued this financial report:

FedEx Corporation today reported earnings of $2.10 per diluted share for the first quarter ended August 31, up 37% from last year’s $1.53 per share.

First Quarter Results

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

• Revenue of $11.7 billion, up 6% from $11.0 billion the previous year

• Operating income of $987 million, up 24% from $795 million last year

• Operating margin of 8.5%, up from 7.2% the previous year

• Net income of $606 million, up 24% from last year’s $489 million

Operating income increased primarily due to higher volumes and increased yields at all three transportation segments. Results in the first quarter also include benefits from lower pension expense and the company’s profit improvement programs. These benefits were partially offset by higher aircraft maintenance expense due to the timing of certain engine maintenance events.

During the quarter, the company acquired 5.3 million shares of FedEx common stock. As of August 31, 2014, no shares remained under the existing share repurchase authorizations. Share repurchases benefited earnings in the quarter by $0.15 per diluted share.

Outlook

FedEx reaffirmed its fiscal 2015 earnings forecast of $8.50 to $9.00 per diluted share. The outlook assumes no net year-over-year fuel impact and continued moderate economic growth. The capital spending forecast for fiscal 2015 remains $4.2 billion.

“FedEx reported strong first quarter results, as all three of our transportation segments drove higher revenues and improved profitability year over year,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Our profit improvement programs are progressing as planned and we continue to expect strong earnings growth this year.”

2015 Rate Increases

As previously announced, FedEx Express, FedEx Ground and FedEx Freight will increase shipping rates effective January 5, 2015.

FedEx Express will increase shipping rates by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services.

FedEx Ground and FedEx Home Delivery will increase shipping rates by an average of 4.9%. In addition, as announced in May, FedEx Ground will also begin applying dimensional weight pricing to all shipments.

FedEx Freight will increase shipping rates by an average of 4.9%. This rate change applies to eligible FedEx Freight shipments within the U.S. (including Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands), between the contiguous U.S. and Canada, within Canada, between the contiguous U.S. and Mexico, and within Mexico.

Details of all changes to rates and surcharges are available at fedex.com/us/2015rates.

Corporate Headquarters Costs

Effective this fiscal year, the company ceased allocating to its transportation segments the costs associated with the corporate headquarters division. These costs are now included in “Corporate, eliminations and other.” Prior year amounts in this release have been revised to conform to the current presentation.

FedEx Express Segment

For the first quarter, the FedEx Express segment reported:

• Revenue of $6.86 billion, up 4% from last year’s $6.61 billion

• Operating income of $369 million, up 35% from $273 million a year ago

• Operating margin of 5.4%, up from 4.1% the previous year

Revenue increased due to higher U.S. domestic package volume and international export package yields partially offset by lower freight revenue. U.S. domestic package volume grew 5%, as 8% growth in overnight and deferred box volume was partially offset by lower envelope volume. U.S. domestic yield increased 1% from higher fuel surcharges, changes in service mix and increased rates. FedEx International Priority® volume grew 1%, while FedEx International Economy® volume increased 3%. International export revenue per package increased 3% due to fuel surcharges, higher rates and weight per package.

Operating income and margin improved as higher U.S. domestic package volume, improved international export yield and benefits from profit improvement programs more than offset higher aircraft maintenance expense and lower freight revenues.

Copyright Photo: Steve Bailey/AirlinersGallery.com. Boeing 777-FHT N883FD (msn 39285) of FedEx Express climbs away from the runway at Anchorage Ted Stevens International Airport (ANC).

FedEx Express: AG Slide Show