FedEx to acquire MultiPack; reports Q2 results

The transaction will enable the FedEx Express business unit to enhance its capabilities in the Mexican domestic market with a broader portfolio of transportation and logistics options.

MultiPack provides a comprehensive range of package delivery, transportation, warehousing and logistics services with an established pick-up and delivery network across all 31 Mexican states and the Distrito Federal.

Founded in 1939, MultiPack operates 48 distribution centres, 13 warehouses and more than 500 retail outlets across the country.

Subject to regulatory approvals and customary closing conditions, the transaction is expected to close in the second quarter of 2011.

After closing, integration of the two companies will be achieved in phases.

In other news, FedEx has reported its second quarter results, including an 18% drop in operating income to US$469 million (Q2 2009: $571m) on revenues of US$9.63 billion, up 12% from $8.6 billion in the prior year period.

While shipments and yields grew in all transportation segments, earnings were reduced by costs related to the combination of FedEx Freight and FedEx National LTL operations, which will become effective in January 2011.  Earnings were also reduced by a reserve for a legal matter at FedEx Express.

FedEx Express segment

• Revenue was up 13% to US$5.99 billion (Q2 2009: $5.31bn)
• Operating income was down 23% to US$264 million (Q2 2009: $345m)
• FedEx International Priority (IP) average daily package volume up 11%, led by exports from Asia.
• US domestic average daily package volume up 3%

FedEx Ground segment

• Revenue up 13% to US$2.08 billion (Q2 2009: $1.84bn)
• Operating income up 24% to US$296 million (Q2 2009: $238m)
• Average daily package volume up 7%
• FedEx SmartPost average daily volume up 17%

FedEx Freight segment

• Revenue up 14% to US$1.22 billion (Q2 2009: $1.07bn)
• Operating loss of US$91 million (Q2 2009: loss of $12m)
• LTL average daily shipments up 8%.
• The operating largely resulted from $86 million of costs associated with the combination of the FedEx Freight and FedEx National LTL operations

For the six-month period ending November 2010, FedEx reported consolidated revenues of US$19.1 billion, up 15% from US$16.6 billion in the prior year period.

FedEx Express accounted for US$11.9 billion in revenue (up 16%), FedEx Ground contributed US$4.04bn (up 13%) and FedEx Freight US$2.48bn (up 21%).