Press Releases
Earnings Jump 23% per Diluted Share
HONG KONG, December 18, 1998 - FDX Corporation today reported earnings increased to US$1.23 per diluted share for the quarter ended November 30, up from US$1.00 per share last year.
FDX Corp., parent of Federal Express Corp. (FedEx) and RPS, Inc. (RPS), reported the following consolidated results for the second quarter:
- Revenue of US$4.2 billion, up 7% from US$3.9 billion the previous year
- Operating income of US$337 million, up 17% from US$289 million a year ago
- Net income of US$183 million, 22% above last year's US$150 million
"FDX Corp. continues to improve its financial performance by strategically targeting growth in the most profitable U.S. domestic services and by effectively controlling costs," said Chairman, President and Chief Executive Officer Frederick W. Smith.
Strong Profit Increases at FedEx
For the second quarter, FedEx reported the following:
- Revenue of US$3.5 billion, up 6% from last year's US$3.3 billion
- Operating income of US$251 million, 17% over US$214 million a year ago
"The FDX portfolio management strategy has freed FedEx to focus on its core strength - industry-leading overnight express service - as evidenced by resurgent volume growth in the higher-yielding FedEx Priority Overnight® and FedEx Standard Overnight® package services," said Executive Vice President and Chief Financial Officer, Alan B. Graf, Jr. "Priority Overnight and Standard Overnight package volumes for the quarter increased 10%, year over year."
FedEx's U.S. domestic revenue grew to US$2.5 billion for the quarter compared to US$2.4 billion last year. FedEx improved its U.S. domestic operating income by 30% to US$217 million from US$168 million last year due to strong yield management, tough cost controls and lower fuel prices. Income from the sale of FedEx aircraft noise reduction kits, which is included in operating income, was US$28 million compared to US$34 million a year ago.
FedEx remained profitable in its international operations, despite continued weakness in trans-Pacific traffic and a general softness in many international economies. FedEx recorded international revenue of US$964 million, up from US$939 million last year with international operating income of US$34 million, compared to US$46 million a year ago. Price increases, cost controls and fuel price declines helped offset declining airfreight pounds and yields and currency exchange impacts.
The net pre-tax cost of contingency plans related to the pilot negotiations, including contracts for supplemental airlift and ground transportation, are estimated to range from US$110 million to US$120 million. These costs did not materially affect the second quarter. However, these expenses will restrain earnings during the second half of FY99.
RPS Revenue and Volume Up
For the second quarter, RPS reported the following:
- Revenue of US$481 million, 14% above last year's US$420 million
- Operating income of US$61 million, up 13% from US$54 million a year ago
On a per-day basis, revenue increased 9% after adjusting for three additional shipping days in this year's second quarter. Operating income improved 7% on a per-day basis over last year. RPS revenue per package grew a strong 5% year over year during the quarter.
"The significant improvement in U.S. domestic profitability at RPS and FedEx demonstrates the growth and earnings power inherent in the diversified FDX portfolio," said Graf.
Viking Freight, Inc. Profitability Improves
For the second quarter, Viking reported the following:
- Revenue of US$94 million, 7% above last year's US$88 million
- Operating income of US$7 million, up 12% from US$6 million a year ago
FDX Corp., a US$16 billion holding company, provides comprehensive transportation, logistics and supply chain management solutions. FDX Corp.'s principal operating subsidiaries are Federal Express Corp., the world's largest express transportation company: RPS Inc., a business-to-business ground small package carrier; Viking Freight, Inc., a less-than-truckload carrier operating principally in the western U.S.; Roberts Express, Inc., a critical-shipment carrier; and FDX Global Logistics, Inc., a contract logistics provider.
Certain statements in this press release may be considered forward-looking statements about management's views with respect to future events and financial performance, which are subject to risks and uncertainties. Actual results may differ from those identified in the forward-looking statements because of important factors such as economic and competitive conditions in the express markets, matching capacity to volume levels and other factors which can be found in FDX Corp's and its subsidiaries' press release and filings with the SEC, including Annual Report, Form 10-Ks and Form 10-Qs.
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