FedEx Reports Higher Income, Revenue in Fiscal Second Quarter
edEx Corp. Wednesday reported it earned $511 million or $1.64 a share for its fiscal second quarter ended Nov. 30, up from $471 million or $1.53 for the same period last year.
Revenue jumped 10% to $8.93 billion, from $8.09 billion a year ago, the company said in a statement.
A new agreement with pilots at FedEx Express reduced the quarter’s earnings by 25 cents a share, FedEx said. It also released earnings guidance for the final two 2007 fiscal quarters and the full fiscal year 2007.
“Earnings for our second quarter were better than forecast primarily due to lower than expected fuel prices, slightly stronger than anticipated growth at FedEx Ground and insurance proceeds related to Hurricane Katrina,” said Alan Graf, FedEx’s chief financial officer.
“Our earnings guidance for the third quarter recognizes a difficult year-over-year comparison, as last year's third quarter benefited from the timing lag that exists between when we purchase fuel and when our indexed fuel surcharges automatically adjust,” he said.
Operating income for the carrier’s less-than-truckload FedEx Freight unit rose 2% over the previous second quarter to $138 million, while revenue jumped 31% to $1.23 billion. LTL yield improved 11% on higher rates and longer-haul LTL shipments.
LTL shipments rose 28% year-over-year, due primarily to the September acquisition of Watkins Motor Lines, rebranded as FedEx National LTL. (Click here for previous coverage.)
The FedEx Express segment’s operating income rose 5% to $502 million and revenue gained 6% to $5.69 billion.
Operating income at the company’s FedEx Ground segment jumped 17% to $191 million, while revenue rose 16% to $1.52 billion.
Operating income for the company’s FedEx Kinkos segment fell 50% to $8 million, while revenue dipped 2% to $519 million.
FedEx is ranked No. 2 on the Transport Topics 100 list of the largest for-hire carriers in the United States and Canada.
