FedEx reports Q4 results and warns of a tough year ahead

FedEx reported a fourth quarter fiscal year loss and has warned that earnings for 2020 will be affected by weakness in global trade.

The company reported a fourth-quarter revenue increase of 2.9% to $17.8bn, but a net loss of $1.97bn compared with a profit of $1.13bn for the prior year.

The company was hit by a series of one-off expenses during the quarter, such as retirement plan accounting adjustments and TNT integration costs, which are now expected to total $1.7bn.

With these costs stripped out of the results, the company would have reported a profit of $1.32bn.

Fourth quarter operating income was negatively affected by lower FedEx International Priority package and freight revenues at FedEx Express, higher costs at FedEx Ground and business realignment costs primarily associated with the US-based voluntary employee buyout programme, it said.

Partially offsetting these factors were the benefits from US volume growth, increased revenue per shipment at FedEx Freight and FedEx Ground, lower variable incentive compensation expenses and a favourable net impact of fuel at all transportation segments.

Looking ahead, during fiscal 2020, operating income at FedEx Ground and FedEx Freight is expected to increase due to higher revenues.

At FedEx Express, macroeconomic weakness and trade uncertainty, continued mix shift to lower-yielding services and a strategic decision to not renew its Amazon domestic US contract will negatively impact operating income.

For these reasons the company is predicting mid-single digit percentage point decline in diluted earnings per share for fiscal 2020.

“Our fiscal 2020 performance is being negatively affected by continued weakness in global trade and industrial production, especially at FedEx Express,” said Alan B. Graf FedEx Corp executive vice president and chief financial officer.

“While we are adjusting our costs to mitigate revenue weakness and market shifts, we will continue to invest in areas that expand our capabilities, improve our long-term efficiencies and reduce our cost to serve.”

In a wide-ranging business review following publication of the results, chairman Fred Smith slammed US protectionist trade policy.

Share this story

Related Topics

Latest express news

Qatar Cargo set to exit 747-8F operations as UPS takes aircraft

Qatar Airways Cargo looks set to offload its two Boeing 747-8 freighters with UPS adding the two jumbos. Speaking following…

Read More

Share this story

DHL Express and Singapore Airlines add fifth freighter

DHL Express and Singapore Airlines (SIA) have deployed the fifth and final freighter as part of a tie-up signed in…

Read More

Share this story

DHL, FedEx and UPS face India competition probe

DHL, FedEx and UPS are under investigation by the Competition Commission of India (CCI) over alleged antitrust violations. Newswire Reuters…

Read More

Share this story

Air Cargo News

Air Cargo News
Established in 1983, Air Cargo News is the leading source of news, information, interviews, analyses and reports to the global airfreight industry. Our leading portfolio includes print, digital and events that give businesses in the airfreight industry the ability to connect with decision-makers in this sector.