FedEx Corp. Reports Strong Third Quarter Earnings Growth


MEMPHIS, Tenn., March 18, 2015 ... FedEx Corp. (NYSE: FDX) today reported earnings of $2.01 per diluted share for the third quarter ended February 28, compared to $1.23 per share last year.

“We had a very successful peak season as volumes grew across all transportation segments, and our profit improvement programs are moving ahead as scheduled,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “We believe our strategy is sound, our culture is unique, and our customers value our broad portfolio of business solutions.”

Third Quarter Results

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

  • Revenue of $11.7 billion, up 4% from $11.3 billion the previous year
  • Operating income of $962 million, up 50% from $641 million last year
  • Operating margin of 8.2%, up from 5.7% the previous year
  • Net income of $580 million, up 53% from last year’s $378 million

Operating results improved due to volume and base yield growth in all three transportation segments, a significant net benefit from fuel, benefits from profit improvement program initiatives, a lower year-over-year weather impact and reduced pension expense. These improvements were partially offset by higher variable incentive compensation accruals.

Share repurchases had a $0.11 year-over-year positive impact on third quarter earnings per diluted share.


FedEx projects earnings to be $8.80 to $8.95 per diluted share for fiscal 2015. This outlook assumes continued moderate global economic growth. The capital spending forecast for fiscal 2015 remains $4.2 billion.

“We expect continued revenue and earnings growth this year, driven by ongoing improvements in all of our transportation segments,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Variable incentive compensation accruals will continue to increase as our financial performance improves, and we expect to deliver record fourth quarter and fiscal year earnings.”

FedEx Express Segment

For the third quarter, the FedEx Express segment reported:

  • Revenue of $6.66 billion, compared to last year’s $6.67 billion
  • Operating income of $384 million, up 129% from $168 million a year ago
  • Operating margin of 5.8%, up from 2.5% the previous year

Revenue was essentially flat, as lower fuel surcharges and unfavorable currency exchange rates more than offset volume and base yield growth. U.S. domestic package volume grew by 4%, including 5% growth in overnight box. U.S. domestic revenue per package decreased 2% due to lower fuel surcharges, partially offset by higher base rates. FedEx International Economy volume grew 4%, while FedEx International Priority volume was flat. International export revenue per package decreased 4%, as lower fuel surcharges and unfavorable currency exchange rates were partially offset by favorable service mix and higher rates.

Operating results were higher as increased base revenue, a significant net benefit from fuel and a lower year-over-year weather impact all contributed to the quarter. In addition, the company continued to benefit from profit improvement program initiatives. Partially offsetting these favorable factors were increased variable incentive compensation accruals and aircraft maintenance expenses.

FedEx Ground Segment

For the third quarter, the FedEx Ground segment reported:

  • Revenue of $3.39 billion, up 12% from last year’s $3.03 billion
  • Operating income of $558 million, up 14% from $490 million a year ago
  • Operating margin of 16.4%, up from 16.2% the previous year

FedEx Ground average daily volume grew 7% in the third quarter due to growth in both business to business and home delivery services. Revenue per package increased 3% due to base rate increases and higher dimensional weight charges. FedEx SmartPost average daily volume decreased 7% due to the reduction in volume from a major customer. SmartPost revenue per package increased 8% due to rate increases and improved customer mix, partially offset by higher postage costs.

Operating results increased due to higher revenue per package, volume growth, a net benefit from fuel and a lower year-over-year weather impact, partially offset by network expansion costs.

FedEx Corp. completed the acquisition of third-party logistics provider GENCO Distribution System, Inc. on January 30, 2015. The financial results of GENCO are included within the FedEx Ground segment from the date of acquisition. GENCO had an immaterial impact on the quarter’s results.

FedEx Freight Segment

For the third quarter, the FedEx Freight segment reported:

  • Revenue of $1.43 billion, up 6% from last year’s $1.35 billion
  • Operating income of $68 million, up 94% from $35 million a year ago
  • Operating margin of 4.8%, up from 2.6% the previous year

Less-than-truckload (LTL) average daily shipments increased 3%, while LTL revenue per shipment grew 3% due to higher rates.

Operating results improved due to the positive impacts of higher LTL revenue per shipment and higher average daily LTL shipments.

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 $47 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 325,000 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 third quarter fiscal 2015 Statistical Book. These materials, as well as a webcast of the earnings release conference call to be held at 8:30 a.m. EDT on March 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, our ability to execute on our profit improvement programs, legal challenges or changes related to FedEx Ground’s owner-operators, 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.