FEDEX BOOSTS FIRST-QUARTER INCOME 45%
FedEx Corp. said Thursday its fiscal year 2003 first-quarter net income climbed 45 percent to $158 million, on strong results from FedEx Ground and FedEx Express.
Operating income for the fiscal quarter ended Aug. 31 rose 20 percent to $283 million on revenues of $5.45 billion, up 8 percent.
Total daily package volume at FedEx Express and FedEx Ground grew a combined 11 percent in the first quarter, FedEx said.
FedEx Express saw operating income rise 6 percent to $128 million on revenue of $3.93 billion, up 5 percent. FedEx contributed revenue improvement to incremental growth in the express carrier's transportation agreement with U.S. Postal Service and growth in FedEx International Priority volume. Maintenance expenses and an increase in employee benefit expenses impacted operating results during the quarter, the company said.
International Priority volume rose 7 percent in the first quarter, the highest increase since the third quarter of 2001. IP growth was paced by a 26-percent increase in Asian exports.
FedEx Express' average daily package volume was up slightly while express package yield was down slightly.
FedEx Ground, the small-package ground delivery service provider, saw operating income jump 68 percent to $101 million, as revenue rose 33 percent to $826 million. Average daily package volume also grew 33 percent while yield per package rose 1 percent.
Volume in the quarter included an estimated 140,000 to 150,000 daily packages attributed to the Teamster's negotiations with competitor United Parcel Service, FedEx said.
'About one fourth of the FedEx Ground's total growth came from FedEx Home Delivery, which was expanded to nationwide on Sept. 10.
FedEx Freight, the regional less-than-truckload unit, saw operating income slip 4 percent to $48 million, while revenue improved 4 percent to $533 million. First-quarter results include $6 million in rebranding expenses.
Average daily shipments were up 2 percent while yields rose 5 percent.
FedEx expects second quarter results to be in the range of 75 to 85 cents per diluted share, compared to 81 cents per diluted share a year ago, said Alan B. Graf Jr., executive vice president and chief financial officer. 'We remain comfortable with the company's previous earnings guidance of $2.77 per diluted share for fiscal 2003.'
' FedEx predicts a 'modest recovery in the second half of our fiscal year,' Graf added.