Trucking and package delivery giant FedEx Corp. on Wednesday reported a 24% surge in its fiscal year first quarter profit.
Net income totaled $606 million or $2.10 per share, up 37% from last year’s $1.53 per share. Revenue was $11.7 billion, an increase of 6% from the same time a year earlier.
“FedEx Corp. is off to an outstanding start in fiscal 2015, thanks to very strong performance at FedEx Ground, solid volume and revenue increases at FedEx Freight and healthy growth in U.S. domestic volume at FedEx Express,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer.
FedEx reaffirmed its fiscal 2015 earnings forecast of $8.50 to $9.00 per share. The outlook assumes no net year-over-year fuel impact and continued moderate economic growth, according to the company.
For the quarter, the FedEx Freight segment reported revenue of $1.61 billion, up 13% from last year’s $1.42 billion, and operating income of $168 million, up 70% from $99 million a year ago.
Less-than-truckload average daily shipments increased 11%, including a 13% increase in demand for priority service. LTL revenue per shipment increased 3% due to higher weight per shipment, increased fuel surcharge revenue and higher rates, according to the company. Operating results improved due to increased LTL revenue per shipment, higher average daily LTL shipments and solid cost management.
The FedEx Express segment reported revenue of $6.86 billion, up 4% from last year’s $6.61 billion, and operating income of $369 million, up 35% from $273 million a year ago.
The company said revenue increased due to higher U.S. domestic package volume and international export package yields partially offset by lower freight revenue. U.S. domestic package volume grew 5%.
The FedEx Ground segment reported revenue of $2.96 billion, up 8% from last year’s $2.73 billion, and operating income of $545 million, up 13% from $483 million a year ago.
FedEx Ground average daily volume grew 6% in the first quarter, primarily driven by growth in e-commerce, according to the company. Revenue per package increased 3% due to increased rates and higher residential and fuel surcharges.
As previously announced, FedEx will increase shipping rates effective January 5, 2015.
FedEx Express will increase shipping rates by an average of 4.9% for U.S. domestic, U.S. export and U.S. import services.
FedEx Ground and FedEx Home Delivery will increase shipping rates by an average of 4.9%. In addition, as announced in May, FedEx Ground will also begin applying dimensional weight pricing to all shipments.
FedEx Freight will increase shipping rates by an average of 4.9%. This rate change applies to eligible FedEx Freight shipments within the U.S.; including Alaska, Hawaii, Puerto Rico and the U.S. Virgin Islands; between the contiguous U.S. and Canada, within Canada, between the contiguous U.S. and Mexico, and within Mexico.
More details about the company’s financial performance can be found on the FedEx website http://investors.fedex.com/investor-home/default.aspx