FEDEX REPORTS SOLID 3Q RESULTS
FedEx Corp., the Memphis-based transportation and logistics group, said net income rose 45 percent to $113 million, on a 10-percent gain in revenue of $4.5 billion, in its fiscal third quarter ending Feb. 29.
Operating income increased 36 percent to $206 million. The big profit increase is skewed by a one-time $81 million charge that lowered earnings in last year’s third quarter.
FedEx cited a 14-percent increase in international package volume, which helped to offset the negative effects of higher fuel costs. Jet fuel expenses were $100 million higher compared to last year. The company expects $75 million in added costs related to fuel in the fourth quarter, and will seek to recoup some revenue with a 4-percent fuel surcharge.
Though international package volume grew at the fastest pace in more than two years, domestic package growth continued at a slow pace, rising less than 3 percent at the FedEx Express air delivery unit. Package growth at FedEx Ground, the former RPS business, rose 4 percent.
FedEx Express reported a 10-percent increase in revenue to $3.8 billion. Operating income was up 51 percent at $143 million, excluding the effects of the one-time charge last year.
Revenue at FedEx Ground rose 7 percent to $487 million, while operating income fell 21 percent to $39 million, due to investments made to start-up FedEx’s new Home Delivery unit, which launched service in several major U.S. cities early this month.
Year-to-date, net income is up 8 percent at $443 million on an 8.2-percent increase in revenue of $13.4 billion.