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FedEx Corp. Earnings Surge in the First Quarter


FedEx Corp. (NYSE: FDX) today reported earnings of $2.10 per diluted share for the first quarter ended August 31, up 37% from last year’s $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 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 year’s $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 company’s 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.


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.”

2015 Rate Increases

As previously announced, FedEx Express, FedEx Ground and FedEx Freight will increase shipping rates effective January 5, 2015.

FedEx Express will increase shipping rates by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services.

FedEx Ground and FedEx Home Delivery will increase shipping rates by an average of 4.9%.  In addition, as announced in May, FedEx Ground will also begin applying dimensional weight pricing to all shipments.

FedEx Freight will increase shipping rates by an average of 4.9%.  This rate change applies to eligible FedEx Freight shipments within the U.S. (including Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands), between the contiguous U.S. and Canada, within Canada, between the contiguous U.S. and Mexico, and within Mexico.

Details of all changes to rates and surcharges are available at

Corporate Headquarters Costs

Effective this fiscal year, the company ceased allocating to its transportation segments the costs associated with the corporate headquarters division.  These costs are now included in “Corporate, eliminations and other.”  Prior year amounts in this release have been revised to conform to the current presentation.

FedEx Express Segment

For the first quarter, the FedEx Express segment reported:

     • Revenue of $6.86 billion, up 4% from last year’s $6.61 billion

     • Operating income of $369 million, up 35% from $273 million a year ago

     • Operating margin of 5.4%, up from 4.1% the previous year

Revenue increased due to higher U.S. domestic package volume and international export package yields partially offset by lower freight revenue.  U.S. domestic package volume grew 5%, as 8% growth in overnight and deferred box volume was partially offset by lower envelope volume.  U.S. domestic yield increased 1% from higher fuel surcharges, changes in service mix and increased rates.  FedEx International Priority® volume grew 1%, while FedEx International Economy® volume increased 3%.  International export revenue per package increased 3% due to fuel surcharges, higher rates and weight per package.

Operating income and margin improved as higher U.S. domestic package volume, improved international export yield and benefits from profit improvement programs more than offset higher aircraft maintenance expense and lower freight revenues.

FedEx Ground Segment

For the first quarter, the FedEx Ground segment reported:

     • Revenue of $2.96 billion, up 8% from last year’s $2.73 billion

     • Operating income of $545 million, up 13% from $483 million a year ago

     • Operating margin of 18.4%, up from 17.7% the previous year

FedEx Ground average daily volume grew 6% in the first quarter, primarily driven by growth in e-commerce.  Revenue per package increased 3% due to increased rates and higher residential and fuel surcharges.  FedEx SmartPost average daily volume decreased 10% due to the reduction in volume from a major customer.  SmartPost revenue per package increased 10% due to rate increases and improved customer mix, partially offset by higher postage rates. 

Operating income increased due to higher revenue per package and volume, partially offset by increased network expansion costs.

FedEx Freight Segment

For the first quarter, the FedEx Freight segment reported:

     • Revenue of $1.61 billion, up 13% from last year’s $1.42 billion

     • Operating income of $168 million, up 70% from $99 million a year ago

     • Operating margin of 10.4%, up from 7.0% the previous year

Less-than-truckload (LTL) average daily shipments increased 11%, including a 13% increase in demand for Priority service.  LTL revenue per shipment increased 3% due to higher weight per shipment, increased fuel surcharge revenue and higher rates.

Operating results improved due to increased LTL revenue per shipment, higher average daily LTL shipments and solid cost management.

Corporate Overview

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services.  With annual revenues of $46 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand.  Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 300,000 team members to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs and first quarter fiscal 2015 Statistical Book.  These materials, as well as a webcast of the earnings release conference call to be held at 8:30 a.m. EDT on September 17 are available on the company’s website at  A replay of the conference call webcast will be posted on our website following the call.

Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance.  Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements.  Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, our ability to execute on our profit improvement programs, legal challenges or changes related to FedEx Ground’s owner-operators, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and filings with the SEC.


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