FedEx grows earnings, revenues in Q2 FY2017

The Memphis, Tenn.-based integrator posted a net income of $700 million on revenues of $14.9 billion for the second quarter of fiscal year 2017, which ended Nov. 31, year-over-year increases of 1.3 percent and 19.2 percent, respectively.    FedEx Corp. grew its earnings and revenues for the second quarter of its fiscal year 2017, which ended Nov. 31, according to the company’s most recent financial statements.
   The Memphis, Tenn.-based integrator posted a net income of $700 million on revenues of $14.9 billion for the quarter, year-over-year increases of 1.3 percent and 19.2 percent, respectively.
   After adjusting for expenses associated with the integration of TNT Express, outlook restructuring program costs, and intangible asset amortization expenses, FedEx said earnings stood at $757 million, a 3.8 percent increase from the same period a year earlier. FedEx in late May officially completed its 4.4 billion euro (U.S. $4.9 billion) purchase of the Netherlands-based global express carrier.
   Adjusted diluted earnings per share (EPS) stood at $2.80, missing consensus analyst expectations by $0.10 per share. On a non-adjusted basis, EPS increased to $2.59 per share in Q2 fiscal 2017 from $2.44 per share a year earlier.
   “FedEx increased revenues and operating income despite continued low growth rates in the global economy. We are in the home stretch of our peak shipping season, and our service levels are high, thanks to the outstanding efforts of our hundreds of thousands of team members around the world,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “The integration of TNT Express into our broad portfolio of global business solutions is proceeding smoothly and according to plan.”
   Looking ahead to the remainder of fiscal 2017, because the company is unable to forecast end-of-year mark-to-market pension accounting adjustments, FedEx said it could only provide adjusted earnings guidance. The parcel carrier projected adjusted EPS of between $10.95 per diluted share and $11.45 per diluted share before mark-to-market pension accounting adjustments, but including TNT Express results, up from a previously projected range of $10.85 per share to $11.35 per share.
   Excluding TNT Express-related integration expenses, outlook restructuring program costs and intangible asset amortization, FedEx projects earnings of $11.85 per diluted share to $12.35 per diluted share for the full 2017 fiscal year. Capital expenditures for the year, which include TNT Express, are expected to reach $5.6 billion, up 16.7 percent from $4.8 billion in fiscal 2016.
   “We are on track to achieve our fiscal 2017 earnings forecast, as we continue long-term investments in our networks,” said executive vice president and chief financial officer Alan B. Graf. “While these network projects are impacting FedEx Ground’s near-term profitability, the investments will expand capacity, improve service and enhance long-term returns and cash flows.”
   Meanwhile, the FedEx board of directors of approved the elections of Donald F. Colleran as executive vice president and chief sales officer and Rajesh Subramaniam as EVP and chief marketing and communications officer, effective Jan. 1, 2017. Both Colleran and Subramaniam also will become members of the FedEx strategic management committee.