FedEx Express sees revenues slide but profits increase

FedEx Express saw its first-quarter revenues decline as a result of lower fuel surcharges and exchange rate effects, but operating profits did improve.
The Memphis-based company’s express division, which is currently in takeover talks with TNT, recorded a 4% year-on-year decrease in its fiscal year first-quarter revenues to $6.59bn, while operating income for the period was up 45% on a year earlier to $545m.
It said the revenue slide was down to “lower fuel surcharges and unfavorable currency exchange rates”, which more than offset improved base rates.
Meanwhile, operating income improved due to higher base rates, one additional operating day, and lower international expenses due to currency exchange rates.
US domestic package volume grew by 1%, driven by growth in deferred box and overnight envelope.
US domestic revenue per package decreased 3% due to lower fuel surcharges, partially offset by strong base rates.
FedEx International Economy volume grew 4%, while FedEx International Priority volume decreased 5%.
Revenues at its freight division were flat at $1.6bn, while operating income shrank 21% to $132m.
“Operating results declined primarily due to salaries and employee benefits expense outpacing lower-than-anticipated volume,” it said.
The overall company recorded Generally Accepted Accounting Principal revenues of $12.3bn for the quarter compared with $11.7bn a year ago, while operating income reached $1.14bn from $1.06bn a year ago.
For analysts, the big news was the fact that the integrator has lowered its earnings per share expectations for the year to a range of $10.40 to $10.90, from its previous prediction of $10.60 to $11.10.
It said the lower outlook was based on weaker than expected less than truckload volumes and higher than expected self-insurance reserves and operating costs at FedEx Ground.
It also confirmed that FedEx Express, FedEx Ground and FedEx Freight will increase shipping rates by an average of 4.9% effective January 4, 2016.

Share this story

Related Topics

Latest americas news

Modern Logistics to add second 737-800BCF

Modern Logistics will take delivery of a second 737-800 Boeing Converted Freighter (BCF) in the first half of this year….

Read More

Share this story

Lower leasing demand takes the shine off ATSG earnings

Reduced demand for aircraft leasing, passenger operations and flying for the US military combined to pull down revenue at ATSG…

Read More

Share this story

Rock-It Cargo processes first US electronic ATA carnet

Live events forwarder Rock-It Cargo has piloted the first US electronic ATA Carnet for the temporary export and import of…

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.