FedEx Express Segment Reports Strong Third Quarter Earnings Growth
OREANDA-NEWS. For the third quarter, the FedEx Express segment reported:
* Revenue of USD 6.66 billion, compared to last year's USD 6.67 billion
* Operating income of USD 384 million, up 129% from USD 168 million a year ago
* Operating margin of 5.8%, up from 2.5% the previous year
Revenue was essentially flat, as lower fuel surcharges and unfavorable currency exchange rates more than offset volume and base yield growth. U.S. domestic package volume grew by 4%, including 5% growth in overnight box. U.S. domestic revenue per package decreased 2% due to lower fuel surcharges, partially offset by higher base rates. FedEx International Economy volume grew 4%, while FedEx International Priority volume was flat. International export revenue per package decreased 4%, as lower fuel surcharges and unfavorable currency exchange rates were partially offset by favorable service mix and higher rates.
Operating results were higher as increased base revenue, a significant net benefit from fuel and a lower year-over-year weather impact all contributed to the quarter. In addition, the company continued to benefit from profit improvement program initiatives. Partially offsetting these favorable factors were increased variable incentive compensation accruals and aircraft maintenance expenses.
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