FedEx Corp. Reports Higher Year-Over-Year Second Quarter Results

MEMPHIS, Tenn., December 18, 2013 ... FedEx Corp. (NYSE: FDX) today reported earnings of $1.57 per diluted share for the second quarter ended November 30, compared to $1.39 per share last year. Last year’s second quarter results were impacted by $0.11 per diluted share due to the effects of Superstorm Sandy.

“FedEx posted solid second-quarter earnings, reflecting improved performance at FedEx Express, as the profit improvement plan introduced more than a year ago continues to gain momentum,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “The power of our broad global portfolio continues to drive our growth and I am confident we are well on our way to achieving the ambitious goals we have set.”

Second Quarter Results

FedEx Corp. reported the following consolidated results for the second quarter:

• Revenue of $11.4 billion, up 3% from $11.1 billion the previous year

• Operating income of $827 million, up 15% from $718 million last year

• Operating margin of 7.3%, up from 6.5% the previous year

• Net income of $500 million, up 14% from last year’s $438 million

Operating income and margin increased primarily due to yield and cost management at FedEx Express. Results also benefited from the favorable comparison to last year’s Sandy-impacted results, lower pension expense and a modest benefit from the voluntary employee severance program.

In October, FedEx Corporation announced the authorization of a new share repurchase program of up to 32 million shares of common stock, which augmented the 7.4 million shares then remaining under the previously authorized repurchase program. During the second quarter, the company

repurchased 7.2 million shares of FedEx common stock, increasing the fiscal 2014 year-to-date purchase total to 10.0 million shares. The second quarter share repurchases had no effect on the quarter’s earnings per share, but are expected to improve full year earnings by $0.04 per share.


FedEx is increasing its forecast of full-year earnings per share growth to 8% to 14% above last year’s adjusted results, compared to its previous growth range of 7% to 13%. This outlook reflects share repurchases made to date but does not include any benefit from additional share repurchases. Share repurchases are expected to continue, but the timing will be at the company’s discretion. The outlook also assumes the market outlook for fuel prices and continued moderate economic growth. The capital spending forecast for fiscal 2014 remains $4 billion.

“We remain on track to deliver a solid increase in earnings this fiscal year,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “FedEx Express reported significant year-over-year improvement in earnings during the quarter, aided by continued execution of our profit improvement programs and by ongoing cost reduction initiatives. We continue to look for additional ways to improve efficiencies and remain committed to increasing long-term shareowner value.”

FedEx Express Segment

For the second quarter, the FedEx Express segment reported:

• Revenue of $6.84 billion, down slightly from last year’s $6.86 billion

• Operating income of $326 million, up 42% from $230 million a year ago

• Operating margin of 4.8%, up from 3.4% the previous year

Revenue decreased slightly due to lower express freight revenue and lower fuel surcharges, mostly offset by increased base package yields. U.S. domestic revenue per package increased 2%, as higher rates and weight per package were partially offset by lower fuel surcharges. U.S. domestic average daily package volume decreased slightly.

FedEx International Priority® (IP) revenue per package increased 3% while average daily volume declined 5%. Within the IP category, average daily volume for the lower-yielding distribution services declined while IP average daily volume, excluding these distribution services, increased 1%. FedEx International Economy® average daily volume grew 10%.

Operating income and margin improved year over year due to higher base package yields, lower pension expense, and lower net expenses from ongoing cost reduction activities.

FedEx Ground Segment

For the second quarter, the FedEx Ground segment reported:

• Revenue of $2.85 billion, up 10% from last year’s $2.59 billion

• Operating income of $424 million, up 3% from $412 million a year ago

• Operating margin of 14.9%, down from 15.9% the previous year

FedEx Ground average daily volume grew 8% in the second quarter, as growth in both business-to-business and FedEx Home Delivery services was driven by market share gains. Revenue per package increased 2% due to rate increases and higher residential surcharges, partially offset by lower fuel surcharges. FedEx SmartPost average daily volume increased 9% primarily due to growth in e-commerce. FedEx SmartPost net revenue per package was down 3% due to higher postage rates and lower fuel surcharges, partially offset by rate increases.

Operating income increased due to higher volume and revenue per package. Operating margin declined primarily due to this year’s later start of the holiday shipping season, as Cyber Week occurred in December this year versus November last year. The seasonal increases in volume, revenue and operating income related to Cyber Week will be realized in this year’s third quarter versus the second quarter last year.

FedEx Freight Segment

For the second quarter, the FedEx Freight segment reported:

• Revenue of $1.43 billion, up 4% from last year’s $1.38 billion

• Operating income of $77 million, up 1% from $76 million a year ago

• Operating margin of 5.4%, down from 5.5% the previous year

Less-than-truckload (LTL) average daily shipments and weight per shipment increased 4% and 2%, respectively. LTL revenue per hundredweight decreased 1% primarily due to lower fuel surcharges, higher weight per shipment and shorter length of haul.

Operating income improved slightly as revenue gains from increased shipments and weight per shipment were partially offset by higher purchased transportation costs.

Corporate Overview

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $45 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 300,000 team members to remain “absolutely, positively” focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs and second quarter fiscal 2014 Statistical Book. These materials, as well as a webcast of the earnings release conference call to be held at 8:30 a.m. EST on December 18 are available on the company’s website at A replay of the conference call webcast will be posted on our website following the call.

Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, legal challenges or changes related to FedEx Ground’s owner-operators, our ability to execute on our business realignment program, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.'s and its subsidiaries’ press releases and filings with the SEC.

Media Contact: Jess Bunn 901-818-7463

Investor Contact: Mickey Foster 901-818-7468

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