FedEx has announced its financial results for the third quarter ended February 28, 2021, reporting total revenue at $21.5bn, up 18.7% year-on-year. Operating income was $1.01bn, compared to $411m in Q3 2019; while its operating margin increased to 4.7%, up from 2.4%.
Operating results increased primarily due to strong volume growth in US domestic residential package and FedEx International Priority services and pricing initiatives across all transportation segments. These factors were partially offset by costs to support strong demand and expand services, variable compensation expense, higher labour rates, and one fewer operating weekday.
Severe winter weather during February reduced the quarter’s operating income by an estimated $350m. The weather significantly impaired operations at several of the company’s largest facilities, including the primary FedEx Express hub in Memphis and FedEx Express hubs in Indianapolis and North Texas.
In its Express segment, revenue rose to $10.8bn in Q3 2020, an increase from last year’s $8.9bn. Operating income jumped to $463m, up 70.4% year-on-year.
FedEx Ground segment revenue increased to $8.0bn in Q3 2020, from $5.8bn last year. While operating income rose to $702m, from $355m.
Its Freight segment reported revenues of $1.8bn, up 5.3% year-on-year. Operating income rose to 119m, up 5.0% year-on-year.
“As reflected in this quarter’s results, continued execution of our strategies is producing strong earnings growth and margin improvement across our company. We expect demand for our unmatched e-commerce and international express solutions to remain very high for the foreseeable future,” said Frederick W. Smith, FedEx Corp. Chairman and Chief Executive Officer.
Source: FedEx
