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About FedEx
FedEx Archives: 2001 Press Releases
( BW)(TN-FEDEX)(FDX) FedEx Corp. Reports Higher Second Quarter Earnings; Net Income Increases 26%, FedEx Ground Delivers Record VolumeBusiness Editors MEMPHIS, Tenn.--(BUSINESS WIRE)--Dec. 19, 2001--FedEx Corporation (NYSE:FDX) today reported earnings for the quarter ended November 30 of $0.81 per diluted share, including $116 million ($0.24 per share net of tax) in compensation from the Air Transportation Safety and System Stabilization Act, which is reflected in operating income. Earnings were $0.67 per diluted share in last year's second quarter. FedEx Corp. reported the following consolidated results for the second quarter:
"Earnings exceeded our previous forecast primarily due to a state tax settlement at FedEx Express, lower net fuel expense, improved productivity at FedEx Ground and more pounds than anticipated from the U.S. Postal Service transportation agreement," said Alan B. Graf, Jr., executive vice president and chief financial officer. "Compared to last year's second quarter, earnings improved due to lower variable compensation, reduced fuel expense, incremental revenue from the U.S. Postal Service, and higher revenue and solid expense management at FedEx Ground. FedEx Ground volume growth rates improved in October and November, finishing the quarter up 11% from the previous year." During the quarter, the company continued to aggressively pursue initiatives to provide incremental revenue, including: -- Successful launch of the transportation agreement between FedEx Express and the U.S. Postal Service, which is generating higher than expected revenue. -- A 3.5% average price increase on FedEx Express and FedEx Ground services effective January 7, 2002. -- Extension of the FedEx Online Express Savings Program, which targets small and medium-sized customers. This program has introduced thousands of new shippers to the on-line shipping tools at fedex.com. -- Expansion of the FedEx Home Delivery network to reach 80% of the U.S. population on September 25. The Home Delivery network will be further grown to cover 90% of the U.S. population in February 2002. "FedEx will face a challenging third quarter, as the lingering economic effects from the September 11 attacks are expected to continue, while the government assistance will end," said Graf. "Additionally, we expect higher maintenance costs, reduced fuel surcharge revenue and continued package volume levels below last year at FedEx Express. We also expect a significantly less favorable year-over-year comparison in variable compensation in the third quarter than in the second quarter. Our volume outlook for FedEx Express is for U.S. domestic average daily package volume to be 5% below last year's third quarter and for FedEx International Priority(R) shipments to be down about 2%. In the fourth quarter, our FedEx Express U.S. domestic average daily package volume is expected to be about flat year-over-year. At FedEx Ground, third quarter volume is expected to grow about 16%. As a result, we now expect earnings for the third quarter to be $0.25 to $0.35 per diluted share, and earnings for the fourth quarter to be $0.70 to $0.80 per diluted share. FedEx was free-cash flow positive for the first half of the year and we intend to achieve our positive cash flow goal for the full year." During the quarter, the company purchased 550,000 shares under its share repurchase program. FedEx Express For the second quarter, FedEx Express reported: -- Revenue of $3.81 billion, down 4% from last year's $3.98 billion -- Operating income of $309 million, up 14% from $271 million a year ago FedEx Express recorded $116 million of Air Transportation Safety and System Stabilization Act compensation in the second quarter of which $101 million had been received prior to November 30. "FedEx Express faced various operational disruptions during the quarter, which were driven by uncontrollable external events," said David J. Bronczek, president and chief executive officer. "The company maintained excellent service levels during the quarter and succeeded in reducing hourly staffing levels through decreased hours and attrition, despite the addition of personnel to support the U.S. Postal Service contract. "The U.S. Postal Service transportation and retail agreements are going extremely well and we look forward to a long-term relationship," said Bronczek. FedEx Express experienced second quarter volume losses related to the September 11 attacks, reducing volume numbers that were already weak due to softness in the high-tech and other durable goods sectors. U.S. domestic express average daily package volume declined 10% year-over-year for the second quarter while package volume from its FedEx International Priority service was down 6%. FedEx Express composite package yield for the quarter was flat year-over-year, overcoming a 7% decline in average weight per package. FedEx Express recognized $16.5 million of operating income from the resolution of a state tax matter in the quarter. FedEx Ground For the second quarter, FedEx Ground reported: -- Revenue of $677 million, up 16% from last year's $582 million -- Operating income of $80 million, up 40% from $57 million a year ago "The strong year-over-year revenue and profit improvement at FedEx Ground is a result of significant growth in package volumes and yields, productivity increases in key operating areas and ongoing cost control efforts," said Daniel J. Sullivan, president and chief executive officer. "FedEx Ground continues to achieve strong revenue growth by successfully expanding its small and medium-sized business customer base and from its Home Delivery Service. About half of the quarter's 11% volume growth year-over-year came from FedEx Home Delivery. Total average yield increased 5%. We expect to add additional Home Delivery shippers after the Christmas peak and our planned expansion to cover nearly all of the U.S. population by September 2002 is on track." FedEx Freight For the second quarter, FedEx Freight reported: -- Revenue of $487 million -- Operating income of $47 million "FedEx Freight continues to see excellent results in the areas of yield management, operating efficiencies and cost control," said Douglas G. Duncan, president and chief executive officer. "Although our volumes were impacted in the quarter by the soft economy, American Freightways and Viking Freight remain focused on regional next-day and second-day services and are expected to further benefit from synergies between the two operating companies, as well as from the collaborative efforts with the other FedEx operating companies." Corporate Overview With annual revenues of $20 billion, FedEx Corp. is the premier global provider of transportation, e-commerce and supply chain management services. The company offers integrated business solutions through a network of subsidiaries operating independently, including: FedEx Express, the world's largest express transportation company; FedEx Ground, North America's second largest provider of small-package ground delivery service; FedEx Freight, a leading provider of regional less-than-truckload freight services; FedEx Custom Critical, the world's largest provider of expedited time-critical shipments; and FedEx Trade Networks, a provider of customs brokerage, consulting, information technology and trade facilitation solutions. Additional information and operating data are contained in the company's annual report, Form 10-K, Form 10-Qs and second quarter FY2002 Statistical Book. These materials, as well as a Webcast of the earnings release conference call to be held at 10:30 a.m. EST on December 19, are available on the company's Web site at www.fedex.com/us/investorrelations. A replay of the conference call Webcast will be posted on our Web site following the call and will remain available for approximately two weeks. Certain statements in this press release may be considered forward-looking statements, such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, any impacts on the company's business resulting from the events that occurred on September 11, 2001, as well as general economic and competitive conditions in the markets we serve, matching capacity to volume levels and other factors which can be found in FedEx Corp.'s and its subsidiaries' press releases and filings with the SEC.
FEDEX CORP. FINANCIAL HIGHLIGHTS
(Unaudited)
Second Quarter Fiscal 2002
(In millions, except earnings per share)
Three Months Ended Six Months Ended
November 30 November 30
--------------------- ----------------------
2001 2000 % 2001 2000 %
------ ------ ----- ------- ------ -----
Revenue:(1)
FedEx Express $3,814 $3,981 (4%) $ 7,552 $7,897 (4%)
FedEx Ground 677 582 16% 1,301 1,125 16%
FedEx Freight 487 -- NM 998 -- NM
Other 157 332 (53%) 321 652 (51%)
------ ------ ------- ------
Total Revenue 5,135 4,895 5% 10,172 9,674 5%
Operating Expenses:(1)
Salaries and employee
benefits 2,231 2,000 12% 4,467 3,995 12%
Purchased
transportation 464 439 6% 909 874 4%
Rentals and landing
fees 472 407 16% 904 798 13%
Depreciation and
amortization 342 310 10% 678 612 11%
Fuel 283 313 (10%) 573 563 2%
Maintenance and
repairs 292 278 5% 604 588 3%
Airline Stabilization
Compensation (116) -- NM (116) -- NM
Other 734 803 (9%) 1,485 1,588 (6%)
------ ------ ------- ------
Total Operating
Expenses 4,702 4,550 3% 9,504 9,018 5%
Operating Income
(Loss):(1)
FedEx Express 309 271 14% 430 528 (19%)
FedEx Ground 80 57 40% 140 100 40%
FedEx Freight 47 -- NM 98 -- NM
Other (3) 17 (118%) -- 28 (100%)
------ ------ ------- ------
Total Operating
Income 433 345 26% 668 656 2%
Other Income (Expense):
Interest, net (36) (35) 3% (72) (68) 6%
Other, net (2) 5 (140%) (1) 1 (200%)
------ ------ ------- ------
Total Other Income
(Expense) (38) (30) 27% (73) (67) 9%
------ ------ ------- ------
Pretax Income 395 315 25% 595 589 1%
Provision for Income
Taxes 150 121 24% 226 227 (0%)
------ ------ ------- ------
Income Before Goodwill
Accounting Change 245 194 26% 369 362 2%
Net Income $ 245 $ 194 26% $ 354 $ 362 (2%)
====== ====== ======= ======
Diluted Earnings Per
Share:
Income Before
Accounting Change $ 0.81 $ 0.67 21% $ 1.22 $ 1.25 (2%)
Cumulative Effect of
Accounting Change -- -- NM (0.05) -- NM
------ ------ ------- ------
Diluted Earnings
Per Share $ 0.81 $ 0.67 21% $ 1.17 $ 1.25 (6%)
====== ====== ======= ======
Weighted Average
Common and Common
Equivalent Shares 302 290 4% 302 289 4%
EBITDA(2) $ 773 $ 660 17% $ 1,346 $1,270 6%
Capital Expenditures $ 437 $ 479 (9%) $ 937 $ 819 14%
(1) American Freightways was acquired in Q3 FY01. The FedEx
Freight segment includes the results of operations of Viking
Freight and American Freightways for the current period. Prior
period Viking results are included in Other.
(2) EBITDA is earnings before goodwill accounting change,
interest, taxes, depreciation and amortization.
FEDEX CORP. OPERATING HIGHLIGHTS
(Unaudited)
Second Quarter Fiscal 2002
(In thousands, except yield and operating weekdays)
Three Months Ended Six Months Ended
November 30 November 30
-------------------- --------------------
FEDEX EXPRESS 2001 2000 % 2001 2000 %
------ ------ ---- ------ ------ ----
Operating Weekdays 63 63 -- 128 128 --
AVG DAILY VOLUME/POUNDS
Average Daily Package
Volume:
U.S. Overnight Box 1,141 1,292 (12%) 1,153 1,273 (9%)
U.S. Overnight
Envelope 676 757 (11%) 699 757 (8%)
U.S. Deferred 845 924 (9%) 829 900 (8%)
------ ------ ------ ------
Total U.S. Domestic
Package 2,662 2,973 (10%) 2,681 2,930 (9%)
International Priority 338 359 (6%) 336 348 (3%)
------ ------ ------ ------
Total Average Daily
Packages 3,000 3,332 (10%) 3,017 3,278 (8%)
====== ====== ====== ======
Average Daily Freight
Pounds:
U.S 8,547 4,749 80% 6,416 4,556 41%
International 2,089 2,234 (6%) 2,098 2,273 (8%)
------ ------ ------ ------
Total Avg Daily
Freight Pounds 10,636 6,983 52% 8,514 6,829 25%
====== ====== ====== ======
YIELD
Revenue Per Package:
U.S. Overnight Box $18.06 $18.23 (1%) $18.09 $18.19 (1%)
U.S. Overnight
Envelope 9.87 9.56 3% 9.90 9.58 3%
U.S. Deferred 10.77 10.88 (1%) 10.90 10.87 --
------ ------ ------ ------
Total U.S. Domestic
Package 13.67 13.74 (1%) 13.73 13.71 --
International Priority 44.77 45.27 (1%) 44.33 45.04 (2%)
------ ------ ------ ------
Composite Package
Yield $17.17 $17.13 -- $17.14 $17.04 1%
====== ====== ====== ======
Revenue Per Freight
Pound:
U.S. $ 0.67 $ 0.59 14% $ 0.65 $ 0.58 12%
International 0.75 0.73 3% 0.73 0.75 (3%)
------ ------ ------ ------
Composite Freight
Yield $ 0.69 $ 0.63 10% $ 0.67 $ 0.64 5%
====== ====== ====== ======
FEDEX GROUND
Operating Weekdays 62 62 -- 127 128 (1%)
Average Daily Package
Volume 1,826 1,648 11% 1,697 1,547 10%
Yield $ 5.98 $ 5.69 5% $ 6.04 $ 5.68 6%
FEDEX FREIGHT
Operating Weekdays 62 -- NM 127 -- NM
Shipments Per Day 56 -- NM 57 -- NM
Weight Per Shipment (lbs) 1,112 -- NM 1,116 -- NM
Revenue/CWT $12.55 -- NM $12.38 -- NM
FEDEX CORP
Average Full-Time
Equivalents (FTEs)(1) 185 172 8% 185 170 9%
(1) Second quarter fiscal 2002 average FTEs include approximately
17 thousand employees associated with the acquisition of
American Freightways.
FEDEX CORP. CONSOLIDATED BALANCE SHEET
Second Quarter Fiscal 2002
(In millions)
Nov. 30,
2001 May 31,
(Unaudited) 2001
------- -------
ASSETS
Current Assets:
Cash and cash equivalents $248 $121
Other current assets 3,402 3,380
------- -------
Total Current Assets 3,650 3,501
Net Property and Equipment 8,326 8,100
Other Assets 1,715 1,791
------- -------
$13,691 $13,392
======= =======
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Current portion of long-term debt $200 $221
Other current liabilities 2,941 3,029
------- -------
Total Current Liabilities 3,141 3,250
Long-Term Debt, Less Current Portion 1,896 1,900
Deferred Income Taxes and
Other Liabilities 2,401 2,342
Total Common Stockholders' Investment 6,253 5,900
------- -------
$13,691 $13,392
======= =======
FEDEX EXPRESS FINANCIAL HIGHLIGHTS
(Unaudited)
Second Quarter Fiscal 2002
(In millions, except FTEs)
Three Months Ended Six Months Ended
November 30 November 30
---------------------- ----------------------
2001 2000 % 2001 2000 %
------ ------ ---- ------ ------ ----
Revenue $3,814 $3,981 (4%) $7,552 $7,897 (4%)
Operating Expenses:
Salaries and
employee benefits 1,588 1,582 -- 3,176 3,178 --
Purchased
transportation 143 147 (3%) 286 297 (4%)
Rentals and landing
fees 401 354 13% 769 698 10%
Depreciation and
amortization 199 201 (1%) 398 398 --
Fuel 258 300 (14%) 522 541 (4%)
Maintenance and
repairs 230 238 (3%) 477 506 (6%)
Airline Stabilization
Compensation (116) -- NM (116) -- NM
Intercompany charges 322 346 (7%) 656 673 (3%)
Other 480 542 (11%) 954 1,078 (12%)
----- ----- ----- -----
Total Operating
Expenses 3,505 3,710 (6%) 7,122 7,369 (3%)
----- ----- ----- -----
Operating Income $309 $271 14% $430 $528 (19%)
===== ===== ===== =====
EBITDA $498 $472 6% $811 $925 (12%)
Average Full-Time
Equivalents (000s) 120 124 (3%) 120 124 (3%)
FEDEX GROUND FINANCIAL HIGHLIGHTS
(Unaudited)
Second Quarter Fiscal 2002
(In millions)
Three Months Ended Six Months Ended
November 30 November 30
---------------------- ----------------------
2001 2000 % 2001 2000 %
----- ----- ---- ----- ----- ----
Revenue $677 $582 16% $1,301 $1,125 16%
Operating Expenses:
Salaries and
employee benefits 133 117 14% 258 225 15%
Purchased
transportation 260 227 15% 500 444 13%
Rentals 21 18 17% 37 32 16%
Depreciation and
amortization 33 27 22% 63 52 21%
Fuel 1 1 -- 3 2 50%
Maintenance and
repairs 18 15 20% 36 31 16%
Intercompany charges 58 56 4% 117 109 7%
Other 73 64 14% 147 130 13%
----- ----- ----- -----
Total Operating
Expenses 597 525 14% 1,161 1,025 13%
----- ----- ----- -----
Operating Income $80 $57 40% $140 $100 40%
===== ===== ===== =====
EBITDA $111 $82 35% $200 $148 35%
FEDEX FREIGHT FINANCIAL HIGHLIGHTS
(Unaudited)
Second Quarter Fiscal 2002
(In millions)
Three Months Six Months
Ended Ended
Nov. 30, Nov. 30,
2001 2001
------------- ----------
Revenue $487 $998
Operating Expenses:
Salaries and employee benefits 289 587
Purchased transportation 14 30
Rentals 16 32
Depreciation and amortization 22 42
Fuel 19 39
Maintenance and repairs 22 45
Intercompany charges 2 4
Other 56 121
---- ----
Total Operating Expenses 440 900
---- ----
Operating Income $47 $98
==== ====
EBITDA $69 $138
--30--LS/na* AS/na AC/na
CONTACT: FedEx Corp., Memphis
Media Contact:
Shirlee Clark, 901/818-7463
or
Investor Contact:
Jim Clippard, 901/818-7468
www.fedex.com
KEYWORD: TENNNESSEE
INDUSTRY KEYWORD: AIRLINES TRANSPORTATION CONFERENCE CALLS
EARNINGS
SOURCE: FedEx Corp.
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