FedEx reports “solid” Q2 earnings
FedEx has reported “solid” earnings for the second quarter (Q2) of 2015. Frederick W. Smith, the FedEx chairman, president and chief executive officer, commented: “FedEx Corp. posted solid earnings despite continued weakness in industrial production and global trade, and we are making impressive progress toward our goals to increase margins, earnings per share, cash flows, and returns on invested capital.”
Smith added: “A record number of holiday shipments – fueled by the steady rise of e-commerce – are flowing through the FedEx global networks.”
The FedEx Express segment report revenue of $6.59bn, down 6% from last year’s $7.02bn. Operating income, however, was up 26% to $622m.
According to FedEx: “Revenue decreased 6%, as lower fuel surcharges and unfavorable currency exchange rates more than offset base yield growth. U.S. domestic package volume increased 1%, driven by growth in overnight package. U.S. domestic revenue per package decreased 2% due to lower fuel surcharges, partially offset by higher base rates.”
The FedEx Ground segment reported that revenue was up by 32% to $4.05bn and operating income was up 13% to $526m.
In the FedEx Freight segment revenue was down 2% to $1.55bn and operating income was down 10% to $101m.
FedEx said that the operating results for the freight business declined “primarily due to salaries and employee benefits expense significantly outpacing lower-than-anticipated volume”.
