FedEx delivered strong results in its fourth quarter, due to sequential growth in package volume and the company's ability to leverage its global networks to take advantage of a recovering economy.
Consolidated Q4 results
- Revenue up 20% to US$9.43 billion (Q4 2009: $7.85bn)
- Operating income of US$696 million, compared with an operating loss of $849 million in Q4 2009
- Net income of US$419 million, compared with last year's net loss of $876 million
- Earnings increased as a result of stronger shipment growth in international express and continued growth at FedEx Ground.
- An operating loss at FedEx Freight, the reinstatement of certain employee compensation programs and higher aircraft maintenance expenses impacted the quarter's results.
FedEx Express segment
- Revenue up 23% to US$5.88 billion, (Q4 2009: $4.80bn)
- Operating income of US$413 million, compared with an operating loss of $136 million in Q4 2009
- Operating margin of 7%, compared with (2.8%) in Q4 2009
- FedEx International Priority (IP) average daily package volume increased by 23%, led by exports from Asia.
- US domestic revenue average daily package volume increased by 1%.
- FedEx Express added a ninth scheduled daily transpacific frequency in April, providing needed capacity from Asia to the US, and added a third scheduled daily flight from Asia to Europe, providing the market's first next-day service from Hong Kong to all of Europe.
FedEx Ground segment
- Revenue up 15% to US$1.96 billion (Q4 2009: $1.7bn)
- Operating income up 57% to US$319 million (Q4 2009: $203m)
- Operating margin of 16.3%, compared with 11.9% in Q4 2009
- FedEx Ground average daily package volume increased by 7%, driven by increases in the B2B market and the FedEx Home Delivery service.
- FedEx SmartPost average daily volume increased by 23%
FedEx Freight segment
- Revenue up 30% to US$1.23 billion (Q4 2009: $948m)
- Operating loss of $36 million, compared with an operating loss of $106 million in Q4 2009
- Operating margin of (2.9%), compared with (11.2%) in Q4 2009
- LTL average daily shipments increased by 34%
- Operating losses in the quarter were attributed to lower yields and higher volume-related costs, as well as an US$18 million impairment charge related to the acquisition of Watkins Motor Lines (now FedEx National LTL). Last year's results included charges of US$100 million, mostly related to the Watkins acquisition.
FedEx Services segment
- Revenue was down 6%, due to the September 2009 realignment of FedEx SupplyChain Systems to the FedEx Express reporting segment and declines in copy product revenues.
- Last year's Q4 results included an US$810 million goodwill impairment charge related to the acquisition of Kinko's (now FedEx Office).
Consolidated full year results
- Revenue down 2% to US$34.7 billion (2009: $35.5bn)
- Operating income increased to US$2 billion (2009: $747m)
- Net income increased to US$1.18 billion (2009: $98m)
- Capital spending of US$2.8 billion for 2010 included US$1.5 billion of investments largely related to more fuel-efficient aircraft, including the delivery of six Boeing 777Fs and twelve Boeing 757s.
Outlook
According to Alan Graf Jr, executive vice president & chief financial officer, FedEx expects continued improvement in both revenue and earnings in fiscal 2011.
