FedEx has announced its financial results for its second quarter ended November 30, 2014. The company reported revenue of $11.9bn, up 5% from the prior comparable period of 2013. The company also recorded operating income of $1.01bn, up 22% year-on-year. Accordingly FedEx’s margin stood at 8.49%.
“FedEx posted strong results and a higher operating margin in the second quarter, with continued growth in volumes and base yields in each of our transportation segments,” said Frederick Smith, FedEx’s Chairman, President and Chief Executive Officer.
Operating income and margin increased primarily due to higher volumes and base yields in all three transportation segments. Results in the second quarter also included benefits from the company’s profit improvement programmes, lower pension expense and a slightly positive net impact from fuel. These benefits were partially offset by higher aircraft maintenance expense due to the timing of aircraft maintenance events.
The revenue and operating income results saw positive contributions from each of FedEx’s business segments. FedEx Express saw a 7% rise in revenue and a 36% increase in operating income year-on-year, driven by higher volumes. FedEx Ground saw an 8% rise in revenue and 6% increase in operating income year-on-year. This result was attributed to higher volumes and higher revenue per package. Meanwhile FedEx Freight recorded a year-on-year increase of 11% in revenue and a 35% rise in operating income, the result of higher demand for priority services.
More analysis to follow.
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