FedEx boosted by e-commerce and lower fuel costs, commits to six more freighters
27 / 06 / 2016
Express services giant FedEx has reported on its fourth-quarter results for its 2016 fiscal year (three months ending May 31), as well as its full fiscal year results.
Revenue rose year on year in the results for both the fourth-quarter (up to $13bn from $12.1bn in the same prior year quarter) and full fiscal year (reaching $50.4bn, up from $47.5bn in fiscal 2015).
FedEx’s adjusted net loss in the fourth quarter reached $897m, up from $753m in the 2015 fiscal year. Over the 2016 financial year, adjusted net income was $3.02bn, up from $2.57bn the previous year.
The US parcel company also confirmed that it has ordered six Boeing 767 freighters set for delivery in the 2019 and 2020 financial years. The aircraft, valued at $1.2bn at list prices, were among options incorporated within an order for 50 aircraft that the integrator placed with Boeing as part of a fleet modernisation programme in July last year.
According to FedEx, the full-year’s operating results benefited from profit improvement programme initiatives at FedEx Express, growth in e-commerce business and the positive impact of lower fuel prices.
“Fiscal 2016 was a successful year for FedEx in many ways,” enthused Frederick W Smith, FedEx Corp chairman, president and chief executive.
“Of particular note was our corporate operating margin improvement,” he continued.
“Our May 25 acquisition of TNT Express capped a historic year of significant accomplishments that benefited shareowners, team members and customers, and strongly positions FedEx for long-term profitable growth.”
The news was not all good. FedEx Freight revenues were lower than anticipated during the fiscal year and network expansion costs also had an impact on the bottom line.
The integration of TNT Express’ operations within FedEx Express is expected to take several years.
Capital spending over the 2016 fiscal year period was $8.4bn, while capital spending during this 2017 fiscal year is expected to reach $5.1 bn. The latter figure will include planned aircraft deliveries to support the FedEx Express fleet modernisation programme.
At that time, FedEx placed an order for 50 767-300Fs as well as options to purchase a further 50 of the aircraft type.