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FedEx declares strong revenue & earnings growth
21 Sep '06
3 min read
FedEx Corporation reported earnings of $1.53 per diluted share for the first quarter ended August 31, compared to $1.10 per diluted share a year ago.
Last year's first quarter included a one-time, noncash charge of $79 million to adjust the accounting for certain facility leases, primarily at FedEx Express. Excluding this charge, earnings in last year's first quarter would have been $1.25 per diluted share.
Total combined average daily package volume at FedEx Express and FedEx Ground grew 5 percent year over year for the quarter, due to continued growth in ground and international express shipments.
During the quarter, FedEx Express announced two significant agreements. FedEx Express and the U.S. Postal Service entered into a new agreement for domestic air transportation of mail through 2013. The new agreement is expected to generate more than $8 billion in revenue over the life of the seven-year contract, which begins September 25, 2006.
FedEx International Priority (IP) revenue grew 17 percent for the quarter, as IP revenue per package grew 11 percent, primarily due to fuel surcharges, an increase in package weights, a higher rate per pound and favorable exchange rates.
IP average daily package volume grew 6 percent. U.S. domestic express package revenue increased 5 percent. U.S. domestic revenue per package increased 7 percent, driven by higher fuel surcharges, the January 2006 general rate increase and revenue management actions. U.S. domestic average daily package volume declined 2 percent, reflecting revenue management actions that began last year.
Last year's first quarter included a one-time, noncash charge of $79 million to adjust the accounting for certain facility leases, primarily at FedEx Express. Excluding this charge, earnings in last year's first quarter would have been $1.25 per diluted share.
Total combined average daily package volume at FedEx Express and FedEx Ground grew 5 percent year over year for the quarter, due to continued growth in ground and international express shipments.
During the quarter, FedEx Express announced two significant agreements. FedEx Express and the U.S. Postal Service entered into a new agreement for domestic air transportation of mail through 2013. The new agreement is expected to generate more than $8 billion in revenue over the life of the seven-year contract, which begins September 25, 2006.
FedEx International Priority (IP) revenue grew 17 percent for the quarter, as IP revenue per package grew 11 percent, primarily due to fuel surcharges, an increase in package weights, a higher rate per pound and favorable exchange rates.
IP average daily package volume grew 6 percent. U.S. domestic express package revenue increased 5 percent. U.S. domestic revenue per package increased 7 percent, driven by higher fuel surcharges, the January 2006 general rate increase and revenue management actions. U.S. domestic average daily package volume declined 2 percent, reflecting revenue management actions that began last year.
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