FEDEX 2ND-QUARTER INCOME FLAT

FEDEX 2ND-QUARTER INCOME FLAT    FedEx Corp. said its fiscal-year second-quarter net income was $245 million, unchanged from the year-earlier quarter, despite a 10 percent increase in revenues.
   Revenue for the quarter ended Nov. 30 was $5.67 billion, up from $5.14 billion in the second quarter of 2001. Operating income was $427 million, down 1 percent.
   “Our diverse portfolio of services enabled us to manage well through the current difficult economic environment,” said Alan B. Graf Jr., FedEx Corp.’s executive vice president and chief financial officer.
   Total average package volume at FedEx Express and FedEx Ground grew a combined 13 percent in the quarter.
   FedEx Ground's daily package volume grew 25 percent. Operating income jumped 69 percent to $135 million, while revenue climbed 27 percent to $863 million.
   FedEx Express' package volume grew 5 percent, due largely to exports from Asia where volume increased 27 percent. Revenue rose 7 percent to $4.10 billion while operating income was off 26 percent to $228 million.
   FedEx International Priority volume grew 13 percent in the second quarter, led by exports from Asia.
   FedEx Express’s operating margin declined to 5.6 percent from 8.1 percent last year, due to increases in benefits, maintenance and net fuel costs, FedEx said in a statement.
   FedEx Freight's operating income improved 19 percent to $56 million on revenue of $547 million, up 12 percent, as the less-than-truckload unit expanded operations to include less-than-containerload service to and from Europe.
   FedEx said it anticipates third-quarter net earnings to be 45 to 55 cents per diluted share, up from 39 cents per share in the year-earlier quarter, given weaker-than-expected U.S. economic growth in manufacturing and wholesale sectors.
   On Jan. 6, FedEx will implement its previously announced price increases, averaging 3.5 percent on FedEx Express domestic and U.S. export shipments services, and 3.9 percent on FedEx Ground services.