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About FedEx
FedEx Archives: 1998 Press Releases
( BW)(FDX-CORP)(FDX) FDX Corp. Reports Strong Second Quarter Earnings; Earnings Jump 23% per Diluted ShareBusiness Editors MEMPHIS, Tenn.--(BUSINESS WIRE)--Dec. 17, 1998--FDX Corporation (NYSE:FDX) today reported earnings increased to $1.23 per diluted share for the quarter ended November 30, up from $1.00 per share last year. FDX Corp., parent of Federal Express Corp. (FedEx) and RPS, Inc. (RPS), reported the following consolidated results for the second quarter: -- Revenue of $4.2 billion, up 7% from $3.9 billion the previous year -- Operating income of $337 million, up 17% from $289 million a year ago -- Net income of $183 million, 22% above last year's $150 million "FDX Corp. continues to improve its financial performance by strategically targeting growth in the most profitable U.S. domestic services and by effectively controlling costs," said Chairman, President and Chief Executive Officer Frederick W. Smith. Strong Profit Increase at FedEx For the second quarter, FedEx reported the following: -- Revenue of $3.5 billion, up 6% from last year's $3.3 billion -- Operating income of $251 million, 17% over $214 million a year ago "The FDX portfolio management strategy has freed FedEx to focus on its core strength -- industry-leading overnight express service -- as evidenced by resurgent volume growth in the higher-yielding FedEx Priority Overnight(R) and FedEx Standard Overnight(R) package services," said Executive Vice President and Chief Financial Officer Alan B. Graf, Jr. "Priority Overnight and Standard Overnight package volumes for the quarter increased 10%, year over year." FedEx's U.S. domestic revenue grew to $2.5 billion for the quarter compared to $2.4 billion last year. FedEx improved its U.S. domestic operating income by 30% to $217 million from $168 million last year due to strong yield management, tough cost controls and lower fuel prices. Income from the sale of FedEx aircraft noise reduction kits, which is included in operating income, was $28 million compared to $34 million a year ago. FedEx remained profitable in its international operations, despite continued weakness in trans-Pacific traffic and a general softness in many international economies. FedEx recorded international revenue of $964 million, up from $939 million last year, with international operating income of $34 million, compared to $46 million a year ago. Price increases, cost controls and fuel price declines helped offset declining airfreight pounds and yields and currency exchange impacts. The net pre-tax cost of contingency plans related to the pilot negotiations, including contracts for supplemental airlift and ground transportation, are estimated to range from $110 million to $120 million. These costs did not materially affect the second quarter. However, these expenses will adversely affect earnings during the second half of FY99. RPS Revenue and Volume Up For the second quarter, RPS reported the following: -- Revenue of $481 million, 14% above last year's $420 million -- Operating income of $61 million, up 13% from $54 million a year ago On a per-day basis, revenue increased 9% after adjusting for three additional shipping days in this year's second quarter. Operating income improved 7% on a per-day basis over last year. RPS revenue per package grew a strong 5% year over year during the quarter. "The significant improvement in U.S. domestic profitability at RPS and FedEx demonstrates the growth and earnings power inherent in the diversified FDX portfolio," said Graf. Viking Freight, Inc. Profitability Improves For the second quarter, Viking reported the following: -- Revenue of $94 million, 7% above last year's $88 million -- Operating income of $7 million, up 12% from $6 million a year ago FDX Corp., a $16 billion holding company, provides comprehensive transportation, logistics and supply chain management solutions. FDX Corp. principal operating subsidiaries are Federal Express Corp., the world's largest express transportation company; RPS, Inc., a business-to-business ground small package carrier; Viking Freight, Inc., a less-than-truckload carrier operating principally in the western U.S.; Roberts Express, Inc., a critical-shipment carrier; and FDX Global Logistics, Inc., a contract logistics provider. Certain statements in this press release may be considered forward-looking statements about management's views with respect to future events and financial performance, which are subject to risks and uncertainties. Actual results may differ from those identified in the forward-looking statements because of important factors such as economic and competitive conditions in the express markets, matching capacity to volume levels and other factors which can be found in FDX Corp.'s and its subsidiaries' press releases and filings with the SEC, including Annual Reports, Form 10-Ks and Form 10-Qs.
FDX CORPORATION FINANCIAL HIGHLIGHTS
(Unaudited; Current year data is preliminary)
Second Quarter Fiscal 1999
(In millions, except earnings per share)
FedEx FedEx
Q2 & FYTD &
Caliber Caliber
Three Months Period Six Months Period
Ended 8/17/97- Ended 5/25/97-
11/30/98 11/8/97 11/30/98 11/8/97
-------- -------- -------- --------
Revenue:
FedEx U.S. Domestic $2,518 $2,360 $5,016 $4,790
FedEx International 964 939 1,884 1,807
RPS 481 420 921 778
Viking 94 88 190 190
Other 152 135 281 244
---- ---- ---- ----
Total Revenue 4,209 3,942 8,292 7,809
Operating Expenses:
FedEx U.S. Domestic 2,301 2,192 4,594 4,382
FedEx International 930 893 1,836 1,737
RPS 420 366 811 689
Viking 87 82 176 189
Other 134 120 254 219
---- ---- ---- ----
Total Operating
Expenses 3,872 3,653 7,671 7,216
------ ------ ------ ------
Operating Income (Loss):
FedEx U.S. Domestic 217 168 422 408
FedEx International 34 46 48 70
RPS 61 54 110 89
Viking 7 6 14 1
Other 18 15 27 25
--- --- --- --
Total Operating Income 337 289 621 593
Other Income (Expense):
Interest, net (25) (32) (50) (62)
Other, net - - (3) 11
-- -- --- --
Total Other Income
(Expense) (25) (32) (53) (51)
---- ---- ---- ----
Pretax Income 312 257 568 542
Provision for Income Taxes 129 107 236 227
---- ---- ---- ----
Net Income $183 $150 $332 $315
===== ===== ===== =====
Basic Earnings Per Share $1.24 $1.02 $2.25 $2.15
====== ====== ====== ======
Common Shares 147.554 146.475 147.494 146.406
Diluted Earnings Per Share $1.23 $1.00 $2.23 $2.11
====== ====== ====== ======
Common and Common Equivalent
Shares 148.926 149.278 149.149 148.994
FDX CORPORATION OPERATING HIGHLIGHTS
(Unaudited; Current year data is preliminary)
Second Quarter Fiscal 1999
FedEx FedEx
Q2 & FYTD &
Caliber Caliber
Three Months Period Six Months Period
Ended 8/17/97- Ended 5/25/97-
11/30/98 11/8/97 11/30/98 11/8/97
-------- -------- -------- --------
FEDEX
Operating Weekdays 63 63 129 127
AVERAGE DAILY EXPRESS VOLUME
Priority Overnight 1,319,607 1,245,772 1,289,848 1,236,861
Standard Overnight 646,785 622,041 632,568 626,051
2Day/Express Saver 882,501 854,647 858,023 840,257
Overnight/2Day/Express
Saver Freight 11,428 9,479 10,715 8,698
------- ------ ------- ------
Total U.S.A. Express
Volume 2,860,321 2,731,939 2,791,154 2,711,867
International Priority 284,970 264,901 274,808 255,617
-------- -------- -------- --------
Total Avg Daily Express
Volume 3,145,291 2,996,840 3,065,962 2,967,484
========== ========== ========== ==========
YIELD PER EXPRESS PACKAGE
Priority Overnight $15.34 $15.15 $15.32 $15.28
Standard Overnight 12.39 12.10 12.37 12.13
2Day/Express Saver 9.98 9.63 9.93 10.10
Overnight/2Day/Express
Saver Freight 149.46 142.46 150.21 143.46
------- ------- ------- -------
Total U.S.A. Express Yield $13.55 $13.17 $13.51 $13.36
International Priority 42.45 41.89 41.96 41.73
------ ------ ------ ------
Total Composite Yield $16.17 $15.71 $16.06 $15.80
======= ======= ======= =======
Avg Pounds per Express Package 9.2 8.7 9.0 8.5
Avg Revenue per Express Pound $1.77 $1.80 $1.79 $1.86
INT'L AIRFREIGHT (IXF/ATA)
Millions of Pounds 171.3 188.0 344.3 357.7
Revenue per Pound $0.81 $0.88 $0.79 $0.89
RPS
Operating Weekdays 62 59 126 117
Average Daily Volume 1,463,808 1,410,245 1,386,052 1,321,594
Composite Yield $5.30 $5.05 $5.28 $5.03
VIKING
Operating Weekdays 62 59 127 117
Shipments Per Day 13,073 12,942 12,908 14,946
Revenue/CWT $9.76 $9.52 $9.70 $9.06
FEDERAL EXPRESS CORPORATION FINANCIAL HIGHLIGHTS
(Unaudited; Current year data is preliminary)
Second Quarter Fiscal 1999
(In millions)
Three Months Ended Six Months Ended
November 30 November 30
---------------------------------------
FINANCIAL RESULTS 1998 1997 1998 1997
----------------- ----- ----- ----- ----
Revenues $3,482 $3,299 $6,899 $6,596
Operating Expenses:
Salaries and benefits 1,542 1,425 3,082 2,876
Rentals and landing fees 328 317 642 591
Depreciation and amortization 221 209 442 411
Fuel 151 182 297 356
Maintenance and repairs 218 196 447 395
Other 771 756 1,519 1,489
---- ---- ------ ------
3,231 3,085 6,429 6,118
------ ------ ------ ------
Operating Income 251 214 470 478
Other Income (Expense):
Interest, net (21) (29) (43) (55)
Other, net (2) - (6) 8
--- -- --- -
(23) (29) (49) (47)
---- ---- ---- ----
Pretax Income 228 185 421 431
Provision for Income Taxes 94 78 175 181
--- --- ---- ----
Net Income $134 $107 $246 $250
===== ===== ===== =====
--30--AR/na*
CONTACT: FDX Corp., Memphis
Media Contact: Shirlee Clark, 901/395-3463
Investor Contact: Jim Clippard, 901/395-3468
http://www.fdxcorp.com
KEYWORD: TENNESSEE
INDUSTRY KEYWORD: TRANSPORTATION TRAVEL/AIRLINES EARNINGS
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