Freight, Express and Ground all contributed towards the $1.5bn year-over-year growth in FedEx’s Q3 revenues. The group produced turnover of $16.5bn, but its operating income was down 2.7% to $1.0bn. Its net income of $2.07bn surpassed its 2017 Q3 result of $562m.
Its Express segment grew revenues by 9.3%, but its operating income dropped 23.8%. Improved based rates and higher fuel surcharges provided positive contributions. Its total package volumes fell by 1% as lower international domestic and US domestic volumes offset its international export volume growth. FedEx stated operating results was negatively affected by compensation accruals, peak-related costs, TNT integration expenses and adverse weather.
Ground segment revenues and operating income were up 11.3% and 23.1% respectively. Average daily package volumes were up 6%, whilst cost management exercises helped improve its margin.
Freight segment revenues were 13.4% higher, and its operating income was 34.1% higher. Revenue increased due to LTL revenue per shipment growth of 8% and average daily LTL shipment growth of 6%.
Looking ahead, Frederick W. Smith, FedEx Corp Chairman and Chief Executive Officer, said, “We expect strong operating performance in each of our transportation segments in the fourth quarter.”
FedEx CFO Alan Graf Jr gave further good news, saying that the company was raising its fiscal 2018 outlook due to foreign tax benefits, U.S. tax reform and the company’s improved operating performance.
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