FedEx posts jump in per share earnings
3/17/2005, 4:34 p.m. ET
By WOODY BAIRD
The Associated Press

MEMPHIS, Tenn. (AP) — The FedEx Corp., parent of the world's largest cargo airline, posted third quarter earnings per share of $1.03 Thursday, a 51 percent increase from a year ago that bested Wall Street's expectations.

For the three months ending Feb. 28, the company earned $317 million, up from $207 million, or 68 cents per share, for the same period last year.

Revenues were $7.34 billion, a 21 percent increase from $6.06 billion.

Analysts surveyed by Thomson First Call had forecast per-share earnings of 98 cents.

FedEx shares fell 9 cents to close at $96.84. The stock has traded between $68.75 and $101.55 over the past 52 weeks.

The increased earnings were due largely to a continued growth in International Priority shipments and ground deliveries, FedEx said. The company also reported a 9 percent rise in revenue on domestic express shipments with an average daily volume increase of 6 percent.

"We have solid momentum in the business and customer demand is strong," Frederick W. Smith, the shipping giant's chief executive, said in a statement. "Economic conditions remain favorable, and we are optimistic about future growth prospects."

Noting rising fuel costs, FedEx predicted it would earn between $1.40 and $1.50 per share for the fourth quarter, which ends May 31. Thomson First Call analysts are projecting $1.49 per share.

Ken Hoexter of Merrill Lynch predicted FedEx earnings of $1.51 for the fourth quarter and said investors may pause at FedEx's modest outlook. But he predicted FedEx should be able to cover most of the increased costs with fuel surcharges.

"FedEx likes to be a bit conservative, and this is part of that," he said.

Alan Graf, FedEx's chief financial officer, noted in a phone call with market analysts that a lag between rising fuel costs and implementation of surcharges can run four to six weeks.

FedEx Ground, the company's trucking division, reported a volume growth of 16 percent, which means it is increasing its market share, Hoexter said.

Third-quarter revenues included $499 million from FedEx Kinko's, which the company acquired in February 2004.

With Kinko's, Hoexter said, FedEx has access to more customers interested in shipping with FedEx Ground.

Graf said FedEx is still working on bringing Kinko's to full speed "as we continue to invest in rebranding, training and other costs."

Hey look. Just as fast as it goes down it can go up at the same rate. Remember this was prior to e-commerce

Was that observation 15 years in the making?

No kidding. 2005 I was very low level management at FedEx ground. Things were really good 2008-10. My 401k looks good now though

Things were awful in 2008 for FedEx. Same as 2008 was awful for the country. Remember the 2008 recession?

Of course their profits jumped. It cost me $38 to ship a shoe box size package for Christmas from CA to AZ

Ground was booming. We picked up a ton of contracts at my facility that were previously express contacts. We nearly doubled our volume in a year. It was good for me, flying in the mornings and boxes in the afternoons. My salary exploded.

That’s it? I paid $35 to get a damn Manila envelope from Wisconsin to Texas!! Maybe because it was going to United?

You guys used your Airline ID and got your 50-60% crew member discount?