Tag: USA

Thoughts on FDX’ F3Q:05 earnings report

Posted by | Mar 18, 2005 | |

FDX reported $1.03 EPS for F3Q:05 (Feb. quarter) vs. our estimate of $1.00, recently upwardly revised Consensus (First Call) of $0.98 and 45% better than $0.71 a year ago. Upside to our model was driven primarily by FedEx Ground with modest upside to Kinko’s based on our low expectations. LTL was modestly below our expectations and Express in-line.

Strong operating metrics. Operating income was up 43% y-o-y on 21.1% revenue growth (including 12.8% growth prior to Kinko’s acquisition) and 110bp of y-o-y consolidated margin improvement (150bp improvement not including Kinko’s). This compared with our expectations for 38% operating income growth on revenue growth of 19% and 100bp margin improvement.

Broad based strength. Volume and yield growth rates across virtually every product line were better than we expected (see Exhibit 1) driven by a strong economy, market share gains on the ground, continued rational but competitive pricing and a modest benefit from fuel.

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Freight business opens up lucrative routes for FedEx

Posted by | Mar 18, 2005 | |

When Greg Farmer backs his FedEx truck into the loading bay of a vehicle parts warehouse in Atlanta, it looks like he is too late. All of that day’s small packages are being loaded on another truck bearing the logo of UPS, FedEx’s arch-rival.

But Mr Farmer is not there to collect small packages. His cargo is three big crates, so heavy they need to be manoeuvred by forklift truck. “When I tell people I drive for FedEx they assume I deliver parcels,” says the 29-year-old driver. “I have to explain that we also handle freight.”

While small packages dominate, road freight is becoming an increasingly important part of FedEx’s business.

Freight revenues increased 19 per cent to USD747m in the third quarter and operating profits were up 46 per cent at USD54m.

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FedEx warns oil prices to hit profits

Posted by | Mar 18, 2005 | |

FedEx increased its third-quarter net earnings by a better than expected 53 per cent but warned that high oil prices would erode profits in the fourth quarter.

Alan Graf, chief financial officer, said this year’s renewed increase in fuel prices was having a “significant impact” on margins.

US light crude yesterday rose above USD57 a barrel for the first time, amid strong global demand and tight supply.

However, Fred Smith, chairman and chief executive of FedEx, said he remained confident about prospects for the company and the world economy. “We have solid momentum in the business and customer demand is strong,” he said. “Economic conditions remain favourable, and we are optimistic about future growth.”

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Pitney Bowes applauds introduction of postal reform legislation

Posted by | Mar 18, 2005 | |

Pitney Bowes applauded the introduction of new postal reform legislation by Chairman Susan Collins and Senator Tom Carper, the Committee Democrat who has taken the lead on postal reform issues.

“With the introduction of Senate legislation, we move one step closer to delivering real postal reform that ensures our postal system will be the most efficient and effective that it can be,” said Michael J. Critelli, chairman and CEO of Pitney Bowes. “Having the best Postal Service possible will help everyone who mails — individuals and families for personal correspondence, small businesses that send a few letters and packages a month, and large volume commercial mailers. All of them drive the USD900 billion postal service industry.”

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Escher Group welcomes Elmar Toime as consultant

Posted by | Mar 18, 2005 | |

Escher Group, Ltd., a leading provider of counter automation and business applications to the postal industry, announced today that it has retained the services of Elmar Toime, former deputy chairman of Royal Mail Group and chief executive of New Zealand Post, to identify new business opportunities and develop and promote strategic solutions for customers worldwide. “Elmar Toime is revered by the industry and we are extremely pleased to be working with him,” said Michael Murphy, president and CEO of Escher Group. “Our expertise in providing advanced technologies and business solutions to the postal market combined with Elmar’s extensive industry experience make this a winning relationship for our customers.”

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