FedEx’s posts record profits

FedEx’s posts record profits    FedEx Corp. Wednesday reported best ever fourth quarter and full fiscal year results.
   The Memphis-based company posted consolidated net income of $568 million for its fiscal fourth quarter ended May 31, up 27 percent compared to $448 million in the same period in the previous fiscal year.
   Quarterly operating income was $927 million, an increase of 25 percent from $740 million a year ago. Revenue increased 10 percent to $8.5 billion from $7.7 billion.
   Fourth quarter revenue for FedEx Express was $5.6 billion, up 10 percent from $5.1 billion. The unit’s operating income improved 30 percent to $560 million from $431 million, with an operating margin of 10 percent compared to 8.4 percent in the same quarter last year.
   “FedEx Express achieved a double-digit operating margin in the seasonally strong fourth quarter, driven by revenue growth, yield management and effective cost controls,” FedEx said.
   FedEx Ground’s operating income increased 20 percent to $207 million from $173 million. Revenue rose 15 percent to $1.4 billion from $1.2 billion.
   Operating income at FedEx Freight jumped 49 percent to $142 million, compared to $95 million in the comparable year-earlier period. Revenue was $973 million, up 15 percent from the $843 million posted in the same quarter last year. The company achieved an operating margin of 14.6 percent compared to 11.3 percent in the previous year period. The less-than-truckload carrier improved yield 9 percent “reflecting incremental fuel surcharges and higher rates.”
   For the full 2006 fiscal year, FedEx reported consolidated net income of $1.81 billion, up 25 percent from $1.45 billion. Operating income for the 12-month period was $3.01 billion from $2.47 billion, an increase of 22 percent. Revenue was up 10 percent to $32.3 billion, compared to $29.4 billion in the previous fiscal year.
   “FedEx posted record financial results in the fourth quarter and full year, as we ended our fiscal 2006 in an environment of solid economic growth in the U.S. and in international markets,” said Frederick W. Smith, FedEx’s chairman, president and chief executive officer. “We remain optimistic about the global economic environment for fiscal 2007 and our ability to effectively manage our business.”
   The company’s earnings guidance for the 2007 fiscal year is $6.45 to $6.80 per diluted share.
   FedEx has set a $2.9 billion capital spending budget for its fiscal year 2007. “FedEx will significantly invest in growth opportunities in fiscal 2007, including the addition of Watkins to our portfolio of services and the buyout of our joint venture partner and expansion of our operations in China,” said Alan B. Graf, Jr., FedEx’s executive vice president and chief financial officer.