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 Patrick Burnson · March 17, 2016

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
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 [email protected]

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
Reduce Order Processing Costs by 80%
Sales order automation software will seamlessly transform inbound emailed and printed purchase orders into electronic sales orders that can be automatically processed into your ERP system with 100% accuracy.
Download Today!
From the June 2016 Issue
In the wildly unstable ocean cargo carrier arena, three major consortia are fighting for market share, with some players simply hanging on for survival. Meanwhile, shippers may expect deployment shifts as a consequence of the Panama Canal expansion.
WMS Update: What do we need to run a WMS?
Supply Chain Software Convergence: Synchronization Realized
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Optimizing Global Transportation: How NVOCCs Can Use Technology to Operate More Profitably
Global transportation isn't getting any easier to manage, especially for non-vessel operating common carriers (NVOCCs). Faced with uncertainties like surcharges—but needing to remain competitive when bidding against other providers—NVOCCs need the right mix of historical data, data intelligence, and technology support to make quick and effective decisions. During this webcast you'll learn how Bolloré Transport & Logistics was able to streamline its global logistics and automate contract management.
Register Today!
EDITORS' PICKS
Details Key to Cross-border Ease
Ever-changing regulations are making it risky for U.S. companies engaged in cross-border trade...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo