FedEx reports “solid” Q2 revenues

International delivery company FedEx has reported “solid” earnings for the second quarter (Q2) of 2015.

Speaking of FedEx’s earnings over the last quarter, FedEx Chairman Frederick W Smith said, ““FedEx Corp. posted solid earnings despite continued weakness in industrial production and global trade, and we are making impressive progress toward our goals to increase margins, earnings per share, cash flows, and returns on invested capital.”

He added:  “A record number of holiday shipments – fueled by the steady rise of e-commerce – are flowing through the FedEx global networks.”

FedEx Express reported revenue of $6.69bn, down 6% from last year’s $7.02bn. However operating income grew 26% to $622 million.

A statement from the company said, “Revenue decreased 6%, as lower fuel surcharges and unfavorable currency exchange rates more than offset base yield growth. U.S. domestic package volume increased 1%, driven by growth in overnight package. U.S. domestic revenue per package decreased 2% due to lower fuel surcharges, partially offset by higher base rates.”

FedEx Ground reported revenue was up by 32% to $4.05bn with operating revenue up 13% to $526 million. FedEx Freight saw revenues were down 2% to $1.55bn and operating income down 10% to $101 million.

The statement from FedEx suggested that the fall in Freight revenues was, “primarily due to salaries and employee benefits expense significantly outpacing lower-than-anticipated volume”.

In the next couple of months the company will seal the deal and join with European international delivery company TNT. This will make it the second biggest international delivery business in Europe, and should significantly boost revenues once the merger has taken place. As with all mergers, while the process takes place it is expected to cause some bumps in the road, but once complete this should make the business a significant force to be reckoned with.

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