FedEx Corporation (FedEx Express) (Memphis) reported earnings of $2.01 per diluted share for the third quarter ended February 28, compared to $1.23 per share last year.
Third Quarter Results
FedEx Corp. reported the following consolidated results for the third quarter:
• Revenue of $11.7 billion, up 4% from $11.3 billion the previous year
• Operating income of $962 million, up 50% from $641 million last year
• Operating margin of 8.2%, up from 5.7% the previous year
• Net income of $580 million, up 53% from last year’s $378 million
Operating results improved due to volume and base yield growth in all three transportation segments, a significant net benefit from fuel, benefits from profit improvement program initiatives, a lower year-over-year weather impact and reduced pension expense. These improvements were partially offset by higher variable incentive compensation accruals.
Share repurchases had a $0.11 year-over-year positive impact on third quarter earnings per diluted share.
Outlook
FedEx projects earnings to be $8.80 to $8.95 per diluted share for fiscal 2015. This outlook assumes continued moderate global economic growth. The capital spending forecast for fiscal 2015 remains $4.2 billion.
“We expect continued revenue and earnings growth this year, driven by ongoing improvements in all of our transportation segments,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Variable incentive compensation accruals will continue to increase as our financial performance improves, and we expect to deliver record fourth quarter and fiscal year earnings.”
FedEx Express Segment
For the third quarter, the FedEx Express segment reported:
• Revenue of $6.66 billion, compared to last year’s $6.67 billion
• Operating income of $384 million, up 129% from $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.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. FedEx Express McDonnell Douglas MD-10-10F (DC-10-10F) N389FE (msn 46623) climbs away from Los Angeles International Airport.
FedEx Express aircraft slide show: 
Filed under: FedEx Corporation, FedEx Express Tagged: 46623, DC-10, DC-10-10, DC-10-10F, FedEx Corp, FedEx Corporation, FedEx Express, LAX, Los Angeles, McDonnell Douglas, McDonnell Douglas DC-10, McDonnell Douglas DC-10-10F, McDonnell Douglas MD-10, McDonnell Douglas MD-10-10F, MD-10, MD-10-10F, N389FE
