Q3 revenues up, profits down at FedEx

US delivery and logistics firm FedEx has reported Q3 revenues of $15bn, up from $12.7bn in the same quarter in 2016.

Reported operating income was up from $864m to $1.03bn – but there was actually a drop in the adjusted (non-GAAP) figures, from $1.16bn to $1.12bn.

In a statement issued yesterday (21 March), the company said that operating results were “impacted by the significantly negative net impact of fuel and one fewer operating day at FedEx Express and FedEx Ground, and network expansion at FedEx Ground”.

Looking forward, Alan Graf, FedEx’s executive vice president and chief financial officer, said: “During the next three years, the benefits of the TNT Express integration, fleet modernization, yield management, e-commerce growth and investments in network capabilities and efficiency will drive significant earnings growth.”

Q3 revenues at the FedEx Express segment were up from $6.56bn to $6.78bn, but operating income was down $40m at $555m. The company said this was due to the fuel impact, one less operating day – and $31m of expenses related to the integration of TNT Express.

Revenues for TNT Express were $1.79bn and operating income was $2m. However, FedEx emphasized that the TNT Express as-reported results include $16m of intangible asset amortization expense and $22m of integration expenses, including restructuring charges.

In a conference call with analysts yesterday, CEO Fred Smith offered an optimistic outlook: “Margins, cash flows and returns are going to increase over the next several years.”
 
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