FedEx Corp. reports robust adjusted earnings for third quarter

Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer, told analysts that the company’s strong financial performance was driven by increasing demand for its “broad portfolio of FedEx business solutions.”

By ·

A strong peak season and sustained e-commerce demand is giving FedEx Corp. shareholders another reason to cheer on St. Patrick’s Day.

FedEx Corp. reported adjusted earnings of $2.51 per diluted share for the third quarter ended February 29, compared to adjusted earnings of $2.03 per diluted share a year ago. Without adjustments, FedEx reported earnings of $1.84 for the third quarter compared to $2.18 per diluted share last year.

This year’s quarterly consolidated earnings have been adjusted for expenses related to certain legal matters ($0.61 per diluted share) and the pending acquisition of TNT Express ($0.06 per diluted share).

Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer, told analysts that the company’s strong financial performance was driven by increasing demand for its “broad portfolio of FedEx business solutions.”

At the same time, he maintained that retailers should be paying more for shipments to keep costs from e-commerce contained.

Jerry Hempstead, President, of Hempstead Consulting, sat in on the call and noted that the “incredible increase” was a consequence of careful planning.

“Their margins improved considerably over the prior year driven by increases in package volumes,” he said. “It was also due to all the yield improvement pricing actions they have taken over the last few years that are now compounding.”

Hempstead, who provided insight for shippers in this year’s annual rate forecast, also observed that Fedex took the opportunity during the investor call to announce another yield improving rule change that becomes effective June 1.

“I expect the UPS to quickly announce their match of this move,” added Hempstead.

Also notable in the call was their “diatribe” on the moves Amazon has been making, and to position themselves in the call to distance themselves from addressing any questions, said Hemstead.

“They deflected this by saying ‘we already covered this,’” he said.

 


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at pburnson@peerlessmedia.com.

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

FedEx · Retail · UPS · All Topics
Latest Whitepaper
Outsourced Transportation Management
All the benefits of owning a fleet without the headache of managing it.
Download Today!
From the August 2017 Logistics Management Magazine Issue
Which carriers, third-party logistics providers, and North American ports have crossed the service excellence finish line ahead of their competitors? Our readers have cast their votes, and now it’s time to introduce this year’s winners of the coveted Quest for Quality Awards.
BMW Takes the Inland Road to Efficiency
Global Logistics: No Shortcuts to Security
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...