FedEx Corp. fourth quarter net income increases 7 percent
FedEx Corporation today reported earnings of USD 1.96 per diluted share for the fourth quarter ended May 31, compared to USD 1.82 per diluted share a year ago. The quarter’s results include a gain from a settlement with Airbus related to the A380 order cancellation, which had a net benefit to earnings of approximately USD 0.06 per diluted share.
“FedEx delivered solid financial results in fiscal 2007 even though we were restrained by a slowing U.S. economy,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “The weakened industrial sector is currently limiting demand for transportation services, but we expect the U.S. economy to begin to show modest year-over-year improvement in the late summer to early fall timeframe. We remain optimistic about prospects for global economic growth, and will continue to invest in projects critical to achieving strong long-term financial performance.”
Fourth Quarter Results
FedEx Corp. reported the following consolidated results for the fourth quarter:
•Revenue of USD 9.15 billion, up 8% from USD 8.49 billion the previous year
•Operating income of USD 1.01 billion, up 9% from USD 927 million a year ago
•Operating margin of 11.1%, up from 10.9% the previous year
•Net income of USD 610 million, up 7% from last year’s USD 568 million
Total combined average daily package volume at FedEx Express and FedEx Ground grew approximately 4% year over year for the quarter, led by continued growth in ground and international express shipments. Shipment volumes and revenues at FedEx Express, FedEx Ground and FedEx Freight were lower than anticipated in the fourth quarter due to the softer economy.
Full Year Results
FedEx Corp. reported the following consolidated results for the full year:
•Revenue of USD 35.2 billion, up 9% from USD 32.3 billion the previous year
•Operating income of USD 3.28 billion, up 9% from USD 3.01 billion a year ago
•Operating margin of 9.3%, unchanged from 9.3% the previous year
•Net income of USD 2.02 billion, up 12% from last year’s USD 1.81 billion
•Earnings per share of USD 6.48, up 11% from USD 5.83 per share a year ago
Revenue grew due to strong FedEx Ground volume growth, as well as continued FedEx Express International Priority revenue growth. Revenue growth also reflected the acquisition of Watkins Motor Lines in September 2006. Fiscal 2007 results included costs associated with upfront compensation and benefits under the new pilot labor contract at FedEx Express, which reduced second quarter earnings by approximately USD 0.25 per diluted share. Fiscal 2006 results included a charge of USD 0.15 per diluted share to adjust the accounting for certain facility leases, primarily at FedEx Express. Capital spending for fiscal 2007 was USD 2.9 billion.
FedEx Express Segment
For the fourth quarter, the FedEx Express segment reported:
•Revenue of USD 5.83 billion, up 4% from last year’s USD 5.61 billion
•Operating income of USD 595 million, up 6% from USD 560 million a year ago
•Operating margin of 10.2%, up from 10.0% the previous year
FedEx Ground Segment
For the fourth quarter, the FedEx Ground segment reported:
•Revenue of USD 1.58 billion, up 12% from last year’s USD 1.42 billion
•Operating income of USD 269 million, up 30% from USD 207 million a year ago
•Operating margin of 17.0%, up from 14.6% the previous year
FedEx Freight Segment
For the fourth quarter, the FedEx Freight segment reported:
•Revenue of USD 1.25 billion, up 28% from last year’s USD 973 million
•Operating income of USD 125 million, down 12% from USD 142 million a year ago
•Operating margin of 10.0%, down from 14.6% the previous year
FedEx Kinko’s Segment
For the fourth quarter, the FedEx Kinko's segment reported:
•Revenue of USD 532 million, down 2% from last year’s USD 542 million
•Operating income of USD 23 million, up 28% from USD 18 million a year ago
•Operating margin of 4.3%, up from 3.3% the previous year.
