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FedEx Archives: 1997 Press Releases

( BW)(FEDERAL-EXPRESS)(FDX) FedEx More Than Doubles First Quarter Net Income

Business Editors

MEMPHIS, Tenn.--(BUSINESS WIRE)--Sept. 15, 1997--Federal Express Corp. (NYSE: FDX) net income for the quarter ended Aug. 31 more than doubled from the same quarter last year. Net income was $143.3 million compared to last year's first quarter net income of $62.0 million. Earnings per share increased to $1.22 per share from $0.54 per share a year ago. Revenues for the quarter were $3,297.2 million, 22% higher than last year's $2,692.3 million. Operating income increased to $264.2 million from $129.9 million, and pretax income rose to $247.0 million from $107.7 million a year ago. "These excellent financial results are directly tied to the outstanding performance of our 137,000 motivated employees who delivered more than 9,500,000 extra packages during the UPS strike," said Chairman, President and Chief Executive Officer Frederick W. Smith. "FedEx was the global express distribution leader going into the quarter, and our leadership position is even stronger now." International operating income for the first quarter was $23.2 million on international segment revenues of $867.4 million. In last year's first quarter, the international segment reported operating income of $3.7 million on revenues of $737.8 million. "Our international operating profit increased six-fold from last year's first quarter due to robust 18% volume growth in our premium FedEx International Priority(R) (IP) service coupled with a 3% increase in IP's revenue per package," said Executive Vice President and Chief Financial Officer Alan B. Graf, Jr. "We enhanced our unparalleled global network with the Sept. 1 launch of the industry's only overnight service from Osaka to Memphis and an around the world flight linking key markets in the U.S., Europe, the Middle East and Asia." The company's U.S. domestic operating income was $241.0 million on revenues of $2,429.8 million, compared to operating income of $126.2 million on revenues of $1,954.5 million in last year's first quarter. Last year's first quarter included $28 million attributable to the temporary expiration of the federal excise tax on the transportation of property by air. "It is difficult to precisely analyze the impact of the additional volume during the 12 operating days of the UPS strike. However, we estimate approximately 15% of the 800,000 extra packages carried per day have been retained. The volume not retained contributed approximately $150 million in U.S. domestic revenues, or $0.25 to $0.30 net per share to the quarter's earnings," said Graf. "We had good momentum at the start of the quarter even before the strike. The results were within the company's targets after considering the effect of this quarter's events, including the strike, the implementation of distance-based pricing and the roll-out of FedEx Express Saver(R)." Sales of aircraft noise-reduction kits contributed an incremental $22 million to the company's operating income compared to last year's first quarter. A net gain of $17 million was also realized from the insurance settlement on an MD11 aircraft destroyed in an accident in July. The gain was almost evenly split between operating income and non-operating income. The effect of this gain was partially offset by an unrelated $9 million addition to an operating expense reserve for the disposition of Boeing 747-200 aircraft. The net combined effect of these items contributed approximately $0.03 per share to the quarter's earnings. The 2% fuel surcharge on U.S. express services and IP packages originating in the U.S. was lifted August 1, 1997. Federal Express is the world's largest express transportation company, providing fast and reliable services for more than 2.9 million items in 212 countries each working day. The company employs approximately 137,000 people and has more than 42,500 drop-off locations, 590 aircraft and 38,500 vehicles in its integrated global network. FedEx maintains electronic connections with more than 750,000 users via FedEx PowerShip(R), FedEx Ship(R) and FedEx interNetShip(SM). Federal Express reported revenues of $11.5 billion for its fiscal year ended May 31, 1997. -0- *T FEDERAL EXPRESS CORPORATION FINANCIAL HIGHLIGHTS (Unaudited; Current year data is preliminary) First Quarter Fiscal 1998 (In millions, except earnings per share and operating data) Three Months Ended August 31, 1997 1996 FINANCIAL RESULTS Revenues $ 3,297.2 $ 2,692.3 Operating Expenses: Salaries and benefits 1,450.5 1,231.4 Rentals and landing fees 274.5 253.4 Depreciation and amortization 202.4 190.2 Fuel 173.8 153.6 Maintenance and repairs 208.4 181.4 Other 723.4 552.4 ------------ ------------ 3,033.0 2,562.4 Operating Income 264.2 129.9 Other Income (Expense): Interest, net (25.8) (21.8) Other, net 8.6 (0.4) ------------ ------------ (17.2) (22.2) Pretax Income 247.0 107.7 Provision for Income Taxes 103.7 45.7 Net Income $143.3 $62.0 Earnings Per Share $1.22 $0.54 Common and Common Equivalent Shares 117,343 114,934 OPERATING DATA Operating Weekdays 64 64 AVERAGE DAILY EXPRESS VOLUME Priority Overnight 1,228,089 1,092,863 Standard Overnight 629,998 625,074 2Day/Express Saver 826,091 574,293 Overnight/2Day/Express Saver Freight 7,930 4,322 Total U.S.A. Express Volume 2,692,108 2,296,552 International Priority 246,478 209,238 Total Average Daily Express Volume 2,938,586 2,505,790 YIELD PER EXPRESS PACKAGE Priority Overnight $15.41 $15.34 Standard Overnight 12.17 10.81 2Day/Express Saver 10.59 9.81 Overnight/2Day/Express Saver Freight 144.64 153.10 Total U.S.A. Express Yield $13.55 $12.98 International Priority 41.56 40.37 Total Composite Yield $15.90 $15.27 Avg. Pounds per Express Package 8.3 6.8 Avg. Revenue per Express Pound $1.92 $2.24 INTERNATIONAL AIRFREIGHT (IXF/ATA) Millions of Pounds 169.7 149.7 Revenue per Pound $0.89 $0.92 *T --30--KH/na* LB/na EB/na CONTACT: Federal Express Corp., Memphis Greg Rossiter (Media), 901/395-4440 Shirlee Clark (Media), 901/395-3463 Becky Halvorson, (Investor), 901/395-3468 or Worldwide Web Home Page: http://www.fedex.com KEYWORD: TENNESSEE INDUSTRY KEYWORD: TRANSPORTATION EARNINGS URL: http://www.fedex.com Today's News On The Net - Business Wire's full file on the Internet with Hyperlinks to your home page. URL: http://www.businesswire.com