Segment Results
Quarterly revenues at FedEx Express were $6.98 billion, up 3% year over year. Growth was driven by acquisitions and expanded FedEx Trade Networks, offset by lower fuel surcharges.
Operating income was up 11% year over year at $460.0 million in the fourth quarter, resulting in an operating margin of 6.6%, up 50 bps from 6.1% in the year-ago quarter. The improvement was aided by the favorable impact of capacity reductions, time lags related to fuel surcharge, and other cost reduction initiatives.
The FedEx International Priority (IP) average daily package volume increased 2% for the quarter and revenue per package (yield) increased 1% due to the unfavorable impact of lower rates.
FedEx Ground revenues increased 12% year over year to $2.78 billion in the fourth quarter attributable to volume growth. Operating income was up 13% year over year at $557 million and operating margin increased 10 bps to 20.1%. Higher volumes and revenue per package was partially negated by intercompany costs related to business realignment programs.
FedEx Ground average daily package volume increased 10% driven by increased eCommerce activities. Revenue per package grew 2%. FedEx SmartPost average daily volume expanded 25% and net revenue per package decreased 7% because of higher postal rates.
FedEx Freight revenues were down 1% year over year to $1.39 billion in the fourth quarter, reflecting a drop of 3% in LTL (less-than-truckload) shipments. Yield was, however, up by 1% due to improvement in FedEx Freight cost structures. The segment recorded operating income of $81 million, flat year over year. Operating margin was 5.8%, which also remained unchanged on a year-over-year basis.
FedEx Services revenues fell 6% year over year to $406.0 million in the fourth quarter.