FEDEX 2ND-QUARTER NET INCOME UP 13%
As anticipated, FedEx Corp. reported double-digit earnings growth during its second quarter, as net income rose 13 percent to $194 million for the period ending Nov. 30.
The giant integrator said Dec. 14 that it is experiencing a softening in third-quarter volumes due to the economy and severe weather conditions.
For the second quarter, operating income rose 13 percent to $345 million on revenue of $4.9 billion, up 7 percent.
FedEx Express saw operating income jump 28 percent to $271 million on revenue of $4.0 billion, up 7 percent. FedEx International Priority, the fastest growing segment, saw revenue increase more than 16 percent compared to a robust year-earlier quarter. FedEx Express' U.S. domestic overnight box service rose 4 percent.
FedEx Ground, the small-package ground delivery service, saw operating income fall 13 percent to $57 million, despite a 12-percent increase in revenues, to $582 million. The operating income included a $13-million loss associated with the operation and expansion of the company's FedEx Home Delivery service and expenses associated with rebranding.
FedEx Home Delivery saw second-quarter daily volumes double over the first quarter. This helped FedEx Ground's daily volume rate improve by 7 percent, while yield increased 4 percent.
During the quarter, FedEx Corp. acquired regional motor carrier American Freightways Corp. for about $1.2 billion, including assumed debt, payable in cash and FedEx stock. The purchase expands into the next-day less-than-truckload freight market. Coupled with FedEx subsidiary Viking Freight, FedEx will be able to provide all-points coverage in 48 states.
The purchase of American Freightways is expected to be completed in the first quarter of 2001.