FedEx Corp. Reports First Quarter Results

FedEx Corp today reported earnings of $1.45 per diluted share for the first quarter ended August 31, compared to $1.46 per share last year.
 
“As we announced on September 4, weakness in the global economy constrained revenue growth at FedEx Express during our first quarter and affected our earnings,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer.  “Meanwhile, our FedEx Ground and FedEx Freight segments performed well, with both improving their year-over-year operating margins.  We are taking further actions to reduce costs and adjust our networks to match current and anticipated shipment volumes.”
 
First Quarter Results
 
FedEx Corp. 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.
 
Outlook
 
FedEx projects earnings to be $1.30 to $1.45 per diluted share in the second quarter and $6.20 to $6.60 per diluted share for fiscal 2013, compared to the company’s previous full year forecast of $6.90 to $7.40 per diluted share.  This guidance assumes the current market outlook for fuel prices and does not include the impact of the cost reduction programs currently under review.  The company reported earnings of $1.57 per diluted share in last year’s second quarter.  The capital spending forecast for fiscal 2013 remains $3.9 billion.
 
“Earnings for the first quarter were below our expectations as weak global economic conditions dampened revenue growth, drove a shift by our customers to our deferred services and outpaced our near-term ability to reduce FedEx Express operating costs to match demand levels,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer.  “We plan to provide additional information on our forecast and long-term opportunities at our Investors and Lenders Meeting on October 9-10 in Memphis.”
 
2013 Rate Increases
 
FedEx Express will increase shipping rates by a net average of 3.9% for U.S. domestic, U.S. export and U.S. import services effective January 7, 2013.  The full average rate increase of 5.9% will be partially offset by adjusting the fuel price threshold at which the fuel surcharge begins, reducing the fuel surcharge by two percentage points.  The FedEx Ground and FedEx SmartPost pricing changes for 2013 will be announced later this year.  FedEx Freight implemented a 6.9% general rate increase on July 9, 2012.
 
Details of changes that will be made to FedEx Express surcharges can be found at fedex.com/us/2013rates.
 
FedEx Express Segment
 
For the first quarter, the FedEx Express segment reported:
 
Revenue of $6.63 billion, up 1% from last year’s $6.59 billion
 
Operating income of $207 million, down 28% from $288 million a year ago
 
Operating margin of 3.1%, down from 4.4% the previous year
 
Revenue growth during the quarter was constrained by global economic conditions.  U.S. domestic revenue per package grew 2% as higher rate per pound was partially offset by lower fuel surcharges.  U.S. domestic average daily package volume declined 5%.  FedEx international export average daily package volume grew 1% driven by increases in FedEx international economy from Europe and Asia.  International export revenue per package
 
fell 4% due to the unfavorable impact of exchange rate changes and lower fuel surcharges.  FedEx international priority freight pounds increased 2%, while revenue per pound decreased 4% due to the unfavorable impact of exchange rate changes and lower fuel surcharges.
 
Operating income and margin were lower as declining U.S. domestic package volumes, the demand shift toward lower-yielding international services and increased depreciation and employee benefits expenses more than offset cost-containment activities, such as reductions in flight hours and labor hours.  Recent business acquisitions, exchange rate changes and fuel affected both revenue and expense, but had little net effect on profit for the quarter.
 
FedEx Ground Segment
 
For the first quarter, the FedEx Ground segment reported:
 
Revenue of $2.46 billion, up 8% from last year’s $2.28 billion
Operating income of $445 million, up 9% from $407 million a year ago
Operating margin of 18.1%, up from 17.9% the previous year
FedEx Ground average daily package volume grew 5% in the first quarter driven by increases in both business-to-business and FedEx Home Delivery services.  Revenue per package increased 2% primarily due to increased rates.  FedEx SmartPost average daily volume increased 18% primarily due to growth in e-commerce.  FedEx SmartPost net revenue per package decreased 1% primarily due to higher postage rates.
 
Operating income increased due to higher FedEx Ground revenue per package and increased volume.
 
FedEx Freight Segment
 
For the first quarter, the FedEx Freight segment reported:
 
Revenue of $1.40 billion, up 5% from last year’s $1.33 billion
Operating income of $90 million, up 114% from $42 million a year ago
Operating margin of 6.4%, up from 3.2% the previous year
Less-than-truckload (LTL) average daily shipments increased 4% due to an increase in customer demand for the FedEx Freight Economy service offering in all lengths of haul.  LTL yield increased 2% due to improvements in FedEx Freight Economy yields.
 
Operating income and margin increased primarily due to profitable volume growth, higher yield and continued improvements in operational efficiencies.

Quelle: eyefortransport

Portal: www.logistik-express.com