FedEx Q4 Net Income Rises 47%

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FedEx Corp.'s fourth-quarter earnings jumped 47 percent based on continued growth in ground deliveries and international express shipments, the Memphis, TN, company said yesterday.

For the three months ending May 31, net income was $412 million, or $1.36 per share, up from $280 million, or 92 cents per share, in the year-ago period. The earnings report includes a 1-cent-per-share cost of a job reduction program and a 4-cent-per-share benefit for a reduction in the effective income tax rate.

Revenue was $7.04 billion, up 21 percent from $5.83 billion the previous year. Operating income was $685 million, up 39 percent from $492 million.

Total average daily package volume at FedEx Express and FedEx Ground grew a combined 7 percent year over year for the quarter based on growth in U.S. domestic express shipments, strong growth in international express shipments and higher growth in ground shipments. Revenue per package increased at FedEx Express and FedEx Ground.

"Our entire portfolio of transportation services is experiencing strong demand, especially in ground, international express and regional less-than-truckload services," said Frederick W. Smith, FedEx chairman, president and CEO. "Another bright spot is the contribution of FedEx Kinko's to our earnings. The company's strategy of bundling its broad portfolio of services to customers is working."

For the 2004 fiscal year, FedEx earned $838 million, or $2.76 per share, up from $830 million, or $2.74 per share, in fiscal 2003. Revenue for the year rose to $24.7 billion from $22.5 billion.

FedEx expects earnings of 90 cents to $1 per diluted share in its first fiscal quarter of 2005. Earnings for the year are expected to be $4.20 to $4.40 per diluted share, benefiting from the full-year effect of FedEx Kinko's, growth in FedEx International Priority, FedEx Ground and FedEx Freight shipments and full-year savings from the business realignment programs.

Capital spending for fiscal 2005 is forecast around $1.6 billion. The expected year-over-year increase will fund additional aircraft capacity for FedEx Express, which is driven by growth in FedEx International Priority. Also, more investments will be made in the FedEx Ground network and FedEx Kinko's.


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