FedEx Shows Record Earnings

The fourth quarter numbers for the Memphis-based shipping company detail its record revenue and earnings.

Chairman and CEO Frederick Smith described the company’s success in the completed fourth quarter. “Our strong performance is a result of an effective strategy of cross-selling the full portfolio of FedEx services and delivering outstanding customer service.”

“Our strategy is working well and we continue to innovate to bring more value to our customers worldwide. We see continued steady economic growth, both in the U.S. and in international markets, across many sectors. As we enter fiscal 2006, we are highly optimistic about the business and expect to achieve double-digit earnings growth.”

FedEx earned net income of $448 million USD on revenues of $7.72 billion for the completed fourth quarter. Those figures show an increase over last year’s period, with $412 million earned on $7.04 billion in revenue.

The shipper did see a slight decline in operating margin, from 9.7 percent to 9.6. FedEx attributed this to costs associated with the start-up of a new westbound around-the-world flight in support of future international growth.

In a press release, FedEx noted approximately 6 percent growth in combined average daily package volume year over year for the quarter. Increases in ground deliveries, and in domestic and international express shipments accounted for the growth.

FedEx has lowered its diluted earnings per share forecast for the first quarter. Escalated jet fuel prices were expected to remain high and have depressed the forecast to $1.10 to $1.25 per share. FedEx reimplemented a fuel surcharge in January 2005 to help offset the skyrocketing cost of distillate products like jet fuel.

David Utter is a staff writer for Murdok covering technology and business. Email him here.