FedEx Reports Improved Fourth-Quarter Profit

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edEx Corp. reported Thursday that net income for its fourth quarter ended May 31 rose to $448 million or $1.46 a share, from $412 million or $1.32 a year ago.

FedEx said it expects to earn $1.10 to $1.25 a share for its first fiscal 2006 quarter, which began June 1. For the full 2006 fiscal year, the company projected it would earn $5.20 to $5.45 a share.

The guidance "reflects the recent escalation in jet fuel prices which are expected to remain elevated during the quarter," the company said in a statement.

Bear Stearns analyst Edward Wolfe wrote in a Thursday report that FedEx's earnings fell short of Bear's projection of $1.50 and a consensus $1.48 per share.

Fourth-quarter revenue rose 10% to $7.72 billion. Operating margin fell to 9.6% from 9.7% last year, in part from startup costs of a new westbound around-the-world flight to support future growth at its FedEx Express unit.

Less-than-truckload unit FedEx Freight saw its operating income rise 19% to $95 million. Revenue rose 11% to $843 million.

The division implemented a 5.6% general rate increase effective May 16, and average daily LTL shipments increased 3% in the quarter compared with last year, the company said.

The FedEx Express unit's operating income rose 6% to $431 million, while revenue rose 9% to $5.12 billion.

The FedEx Ground unit’s operating income rose 9% to $173 million, while revenue rose 17% to $1.23 billion for the quarter.

FedEx International Priority’s revenue grew 14% in the quarter.

FedEx Kinko's operating income rose 5% to $41 million, while revenue rose 6% to $553 million. FedEx acquired Kinko's in early 2004.

For the full fiscal 2005 year, FedEx Corp. said it earned $1.45 billion or $4.72 a share, compared with $838 million or $2.76 a share a year earlier.

Fiscal 2005 revenue rose 19% to $29.4 billion.

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