FedEx Reports Improved First-Quarter Profit

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edEx Corp. Wednesday reported a profit for its first quarter ended Aug. 31 of $339 million or $1.10 a share, up 3% from last year’s $330 million or $1.08 a share.

The company’s revenue rose 10% to $7.71 billion over the previous first quarter, FedEx said in a statement.

The company said it took at one-time, non-cash charge of $79 million to adjust the accounting for some of its facility leases, primarily at its FedEx Express unit. Excluding that charge, earnings for the quarter would have been $1.25, it said.

FedEx had said when it issued its fourth-quarter 2005 earnings in June that it expected it would earn $1.10 to $1.25 a share for the first fiscal 2006 quarter and that it would earn $5.20 to $5.45 a share for the full 2006 fiscal year. (Click here for previous coverage.)

In its release Wednesday, the company projected it would earn $1.30 to $1.45 per share for the second quarter and raised its earnings guidance for its full fiscal year to $5.25 to $5.50 per share.

For the first quarter, FedEx Express’ operating income fell 8% to $285 million from a year earlier, while the unit’s revenue rose 11% to $5.12 billion.

Less-than-truckload unit FedEx Freight’s operating income jumped 31% to $135 million, while revenue rose 11% to $892 million.

The FedEx Ground unit’s operating income rose 1% to $148 million, while revenue rose 14% to $1.22 billion for the quarter.

FedEx International Priority’s revenue grew 13% in the quarter, with revenue per package rising 6%, primarily on higher fuel surcharges and package weights, as well as favorable exchange rates, the company said.

FedEx Kinko's operating income fell 16% to $16 million, while revenue rose 6% to $517 million. FedEx acquired Kinko's in early 2004.

FedEx is ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.