Home » 3PL/4PL, Breaking News » FedEx reports strong Q3 earnings

FedEx Corp. reported a net income of US$521 million for the third quarter of its fiscal year ended February 29, 2012, up 126 percent from $231 million a year ago, boosted by robust ground and freight performances during the holiday season.

The company, the world’s second largest package delivery service, saw earnings of $1.65 per diluted share for the third quarter, up from last year’s third quarter earnings of $0.73 per diluted share.

“FedEx Corp. results were driven by improving yields, record holiday package shipping and exceptional performance at FedEx Ground,” said Frederick Smith, FedEx chairman, president, and chief executive officer. “We expect our solid performance to continue in our fourth quarter, capping off a strong fiscal year.”

FedEx reported that revenue for the third quarter rose by 9 percent to $10.56 billion from $9.66 billion the previous year. Operating income of $813 million in the third quarter was 107 percent higher than the $393 million it posted last year. Operating margin, meanwhile, rose 7.7 percent, up from 4.1 percent the previous year.

FedEx’s express segment, its largest, registered an 8 percent increase in sales to $6.54 billion from last year’s $6.05 billion, mostly on the back of higher prices and heavier packages in the U.S. Operating margin went up 5.3 percent, up from 2.9 percent the previous year.

FedEx’s ground division’s performance benefited from its home delivery services, which include directing packages between residential customers and major retailers. The segment’s revenue for the third quarter grew 14 percent to $2.48 billion, up from last year’s $2.18 billion, and was the best performance by any of FedEx’s businesses. Its operating income ballooned by 43 percent to $465 million from $325 million a year ago. Operating margin was 18.8 percent, up from 14.9 percent the previous year.

The company’s freight segment reported a fourth straight profitable quarter. Hardest hit during the recession, its revenue nonetheless rose 10 percent in the third quarter, to $1.23 billion from last year’s $1.12 billion.  The segment’s operating loss shrank to $1 million, compared with an operating loss of $110 million a year ago.

For fiscal 2012, FedEx projects earnings of $1.75 to $2 per diluted share in the fourth quarter and an adjusted $6.35 to $6.60 per diluted share.

The performance of parcel delivery organizations like FedEx is usually regarded as a bellwether of global consumer attitude and business confidence due to the large number of international shipments they handle.

 

Photo: FedEx

 

 

 

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