FedEx Earnings Beat Expectations

Although there was some damage to the FedEx facilities along the U.S. Gulf Coast and New Orleans is problematic, operations for the carrier have resumed in most of the area hit by Katrina.

The revenues of $7.71 billion climbed from last year’s $6.98 billion, with operating income at $584 million, up 1% over $579 million of a year ago.

With continued growth in international express, U.S. domestic express and ground shipments, the combined average daily package volume for FedEx Express and FedEx Ground grew 5% for the period. Revenues for Express were $5.12 billion, up 11% from the previous year’s $4.62 billion. Part of the Express segment, FedEx International Priority (IP) grew some 13%. Revenues per IP package were up by 7%, due to higher package weights, increased fuel surcharges and favorable exchange rates.

Average daily package volume for FedEx Ground was up 6% for the quarter with an improvement in yield attributed to higher extra services charges, the general rate increase that went into effect on January 1 and implementation of a fuel surcharge again. Revenues were up 14% from last year’s $1.07 billion to $1.22 billion.

Less than truckload carrier, FedEx Freight, had revenues of $892 million, up 11% over last year’s $807 million. Incremental fuel surcharges, higher rates and growth in interregional freight service helped improve FedEx Freight yield by 10%.

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