Tag Archives: 777FS2

FedEx misses second quarter Wall Street estimates but still reports net income of $500 million, up 14%

FedEx Corporation (FedEx Express) (Memphis) today reported earnings of $1.57 per diluted share for the second quarter ended November 30, compared to $1.39 per share last year. Last year’s second quarter results were impacted by $0.11 per diluted share due to the effects of Superstorm Sandy.

“FedEx posted solid second-quarter earnings, reflecting improved performance at FedEx Express, as the profit improvement plan introduced more than a year ago continues to gain momentum,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “The power of our broad global portfolio continues to drive our growth and I am confident we are well on our way to achieving the ambitious goals we have set.”

Second Quarter Results

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

• Revenue of $11.4 billion, up 3% from $11.1 billion the previous year

• Operating income of $827 million, up 15% from $718 million last year

• Operating margin of 7.3%, up from 6.5% the previous year

• Net income of $500 million, up 14% from last year’s $438 million

Operating income and margin increased primarily due to yield and cost management at FedEx Express. Results also benefited from the favorable comparison to last year’s Sandy-impacted results, lower pension expense and a modest benefit from the voluntary employee severance program.

In October, FedEx Corporation announced the authorization of a new share repurchase program of up to 32 million shares of common stock, which augmented the 7.4 million shares then remaining under the previously authorized repurchase program. During the second quarter, the company repurchased 7.2 million shares of FedEx common stock, increasing the fiscal 2014 year-to-date purchase total to 10.0 million shares. The second quarter share repurchases had no effect on the quarter’s earnings per share, but are expected to improve full year earnings by $0.04 per share.

Outlook

FedEx is increasing its forecast of full-year earnings per share growth to 8% to 14% above last year’s adjusted results, compared to its previous growth range of 7% to 13%. This outlook reflects share repurchases made to date but does not include any benefit from additional share repurchases. Share repurchases are expected to continue, but the timing will be at the company’s discretion. The outlook also assumes the market outlook for fuel prices and continued moderate economic growth. The capital spending forecast for fiscal 2014 remains $4 billion.

“We remain on track to deliver a solid increase in earnings this fiscal year,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “FedEx Express reported significant year-over-year improvement in earnings during the quarter, aided by continued execution of our profit improvement programs and by ongoing cost reduction initiatives. We continue to look for additional ways to improve efficiencies and remain committed to increasing long-term shareowner value.”

FedEx Express Segment

For the second quarter, the FedEx Express segment reported:

• Revenue of $6.84 billion, down slightly from last year’s $6.86 billion

• Operating income of $326 million, up 42% from $230 million a year ago

• Operating margin of 4.8%, up from 3.4% the previous year

Revenue decreased slightly due to lower express freight revenue and lower fuel surcharges, mostly offset by increased base package yields. U.S. domestic revenue per package increased 2%, as higher rates and weight per package were partially offset by lower fuel surcharges. U.S. domestic average daily package volume decreased slightly.

FedEx International Priority® (IP) revenue per package increased 3% while average daily volume declined 5%. Within the IP category, average daily volume for the lower-yielding distribution services declined while IP average daily volume, excluding these distribution services, increased 1%. FedEx International Economy® average daily volume grew 10%.

Operating income and margin improved year over year due to higher base package yields, lower pension expense, and lower net expenses from ongoing cost reduction activities.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. A beautiful takeoff portrait of FedEx Express’ Boeing 777-FS2 N852FD (msn 37723) after a stop at Anchorage, Alaska (click on the photo for the full-size view).

FedEx Express: AG Slide Show

Video: How FedEx turns a Boeing 757 freighter in 55 minutes:

Video: FedEx has great TV advertisements that have won several marketing awards. Here is the latest for Christmas 2013:

 

FedEx renews its contract with the United States Postal Service

FedEx Corporation (Memphis) has announced that its FedEx Express (Memphis) subsidiary has entered into a new express air transportation contract with the United States Postal Service. The current contract ends in September 2013, and the new contract will begin in October 2013.

Under this seven-year agreement, valued at approximately $10.5 billion, FedEx Express will provide airport-to-airport transportation of USPS Express Mail and Priority Mail within the United States.

Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 777-FS2 N884FD (msn 37137) gracefully climbs away from the Boeing factory at Paine Field near Everett, Washington.

FedEx Express: AG Slide Show

FedEx’s 2Q net income slips to $438 million, down 12% from last year’s $497 million, orders four Boeing 767-300 freighters

FedEx Corporation (FedEx Express) (Memphis) today reported earnings of $1.39 per diluted share for the second quarter ended November 30, compared to $1.57 per share last year. Superstorm Sandy impacted the quarter’s results by $0.11 per diluted share due to reduced shipment volumes and incremental operating costs.

Second Quarter Results:

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

• Revenue of $11.1 billion, up 5% from $10.6 billion the previous year

• Operating income of $718 million, down 8% from $780 million last year

• Operating margin of 6.5%, down from 7.4% the previous year

• Net income of $438 million, down 12% from last year’s $497 million

The results of the quarter also reflect, primarily at FedEx Express, the net year-over-year negative impact from the timing lag that exists between when fuel prices change and indexed fuel surcharges automatically adjust.

FedEx Express Segment:

For the second quarter, the FedEx Express segment reported:

• Revenue of $6.86 billion, up 4% from last year’s $6.58 billion

• Operating income of $230 million, down 33% from $342 million a year ago

• Operating margin of 3.4%, down from 5.2% the previous year

Revenue increased primarily due to this year’s business acquisitions and growth at FedEx Trade Networks, as core express revenue growth was constrained by global economic conditions and the impact of Superstorm Sandy.

U.S. domestic revenue per package grew 1% as higher rate per pound was partially offset by lower fuel surcharges. U.S. domestic average daily package volume declined 2%. FedEx international export average daily package volume grew 6% driven by increases in FedEx International Economy®(IE) from Europe and Asia and by increases in FedEx International Priority® (IP) from Asia. Higher growth in international deferred services continued, with IE volume growing 14%, while IP volume increased 3% during the quarter. International export revenue per package fell 4% due to the demand shift toward lower-yielding international services and lower fuel surcharges.

Operating income and margin were lower due to the demand shift toward lower-yielding international services, the negative year-over-year impact of net fuel changes, increased depreciation expense, the effects of Superstorm Sandy and higher pension costs. These were partially offset by the favorable impact of cost containment actions.

FedEx Express has entered into an agreement to purchase four additional 767-300 freighters as part of the company’s continued fleet modernization efforts. This brings the total 767-300 orders to 50, with deliveries beginning in fiscal 2014. In concert with this commitment, two 777 freighter deliveries were deferred from fiscal 2015 to fiscal 2016 in order to better match capacity timing to global demand.

Copyright Photo: Brian McDonough. Boeing 777-FS2 N853FD (msn 37724) makes a fuel stop at Anchorage.

FedEx Express: AG Slide Show

FedEx Corporation reports 1Q net income of $459 million, down 1%

FedEx Corporation (FedEx Express) (Memphis) reported earnings of $1.45 per diluted share for the fiscal first quarter ended August 31, compared to $1.46 per share last year.

FedEx Corporation reported the following consolidated results for the first quarter:

• Revenue of $10.79 billion, up 3% from $10.52 billion the previous year

• Operating income of $742 million, up 1% from $737 million last year

• Operating margin of 6.9%, down from 7.0% the previous year

• Net income of $459 million, down 1% from last year’s $464 million

During the quarter, improved FedEx Freight results and the continued strong performance at FedEx Ground were more than offset by lower demand for priority services at FedEx Express.

Copyright Photo: Nick Dean.

FedEx Express: 

FedEx Corporation completes the acquisition of French express transportation company, TATEX

FedEx Corporation (FedEx Express) (Memphis) announced today that it has completed the acquisition of TATEX, a leading French business-to-business express transportation company. This transaction represents the latest step in the company’s strategy to sustainably grow in Europe.

The addition of the TATEX business to the FedEx network will deliver an excellent extension to the service portfolio of both companies and will provide customers with more comprehensive international and domestic service options. The acquisition will give FedEx access to a nationwide domestic ground network which carries 19 million shipments and produces approximately EUR 150 million in revenues annually. In return, TATEX customers will gain direct access to the global FedEx network.

FedEx has been steadily broadening its European network and today’s announcement follows the recent acquisition of Opek, a Polish courier company with 1,200 employees and a network of 44 stations. In fiscal year 2012, FedEx opened 38 new stations across Europe, launched five Boeing 757-200 freighter flights on intra-European routes, and another Boeing 777F freighter (pictured) for long-haul routes—bringing the total number of Boeing 777Fs operating FedEx routes in and out of Europe to four.

FedEx entered the French market in 1985. Since then the company has been continuously expanding its range of international shipping services in the market and today employs over 3,000 team members in the country. In 2009, the company expanded its EMEA hub at Paris’ Roissy Charles de Gaulle airport, making it the biggest FedEx Express hub outside the U.S.

Copyright Photo: Nick Dean. The pictured brand new Boeing 777-FS2 N864FD (msn 37735) at Everett (Payne Field) joined the FedEx fleet on May 15, 2012.

FedEx Express: