FedEx Corp. Earnings Surge in the First Quarter
Wed September 17, 2014 7:30 AM|Business Wire | About: FDX
Volume, Yield Growth Drive Improved Results

MEMPHIS, Tenn.--(BUSINESS WIRE)-- FedEx Corp. (NYSE: FDX) today reported earnings of $2.10 per diluted share for the first quarter ended August 31, up 37% from last years $1.53 per share.

FedEx Corp. is off to an outstanding start in fiscal 2015, thanks to very strong performance at FedEx Ground, solid volume and revenue increases at FedEx Freight and healthy growth in U.S. domestic volume at FedEx Express, said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. More customers are relying on FedEx (FDX) because they appreciate the competitive advantages provided by our broad portfolio of solutions.

First Quarter Results

FedEx Corp. reported the following consolidated results for the first quarter:

" Revenue of $11.7 billion, up 6% from $11.0 billion the previous year

" Operating income of $987 million, up 24% from $795 million last year

" Operating margin of 8.5%, up from 7.2% the previous year

" Net income of $606 million, up 24% from last years $489 million

Operating income increased primarily due to higher volumes and increased yields at all three transportation segments. Results in the first quarter also include benefits from lower pension expense and the companys profit improvement programs. These benefits were partially offset by higher aircraft maintenance expense due to the timing of certain engine maintenance events.

During the quarter, the company acquired 5.3 million shares of FedEx common stock. As of August 31, 2014, no shares remained under the existing share repurchase authorizations. Share repurchases benefited earnings in the quarter by $0.15 per diluted share.

Outlook

FedEx reaffirmed its fiscal 2015 earnings forecast of $8.50 to $9.00 per diluted share. The outlook assumes no net year-over-year fuel impact and continued moderate economic growth. The capital spending forecast for fiscal 2015 remains $4.2 billion.

FedEx reported strong first quarter results, as all three of our transportation segments drove higher revenues and improved profitability year over year, said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. Our profit improvement programs are progressing as planned and we continue to expect strong earnings growth this year.