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FedEx Newsroom

FedEx Corp. Reports Higher Fourth Quarter and Full Year Earnings

June 16, 2010

MEMPHIS, Tenn., June 16, 2010 … FedEx Corp. (NYSE: FDX) today reported earnings of $1.33 per diluted share for the fourth quarter ended May 31.  Last year, the company reported a fourth quarter loss of $2.82 per diluted share, including $3.46 per diluted share of charges resulting primarily from the impairment of goodwill and aircraft.  Excluding these charges, fourth quarter earnings were $0.64 per diluted share a year ago.

“FedEx delivered strong results in our fourth quarter, thanks to sequential growth in package volume and our ability to leverage our unique global networks to take advantage of a recovering economy,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer.  “We ended our fiscal year a stronger company, and I am confident FedEx is very well positioned for future revenue and earnings growth.”

Fourth Quarter Results

FedEx Corp. reported the following consolidated results for the fourth quarter:

 • Revenue of $9.43 billion, up 20% from $7.85 billion the previous year
 • Operating income of $696 million, up from an operating loss of $849
  million last year
 • Operating margin of 7.4%, up from (10.8%) the previous year
 • Net income of $419 million, up from last year’s net loss of $876 million

Earnings increased as a result of stronger shipment growth in international express and continued growth at FedEx Ground.  An operating loss at FedEx

Freight, the reinstatement of certain employee compensation programs and higher aircraft maintenance expenses impacted the quarter’s results.

Full Year Results

FedEx Corp. reported the following consolidated results for the full year:

 • Revenue of $34.7 billion, down 2% from $35.5 billion the previous year
 • Operating income of $2.0 billion, up from $747 million last year
 • Net income of $1.18 billion, up from last year’s $98 million
 • Earnings per share of $3.76, up from $0.31 per share a year ago
  ($3.76 per share excluding the impact of impairment and other charges—see table)

Capital spending for fiscal 2010 was $2.8 billion, with $1.5 billion of investments largely related to more fuel-efficient aircraft, including the delivery of six Boeing 777Fs for use in the international network and 12 Boeing 757s.


FedEx projects earnings to be $0.85 to $1.05 per diluted share in the first quarter and $4.40 to $5.00 per diluted share for fiscal 2011.  This guidance assumes the current market outlook for fuel prices and a continued moderate recovery in the global economy.  The company reported earnings of $0.58 per diluted share in last year’s first quarter.  The capital spending forecast for fiscal 2011 is $3.2 billion, which includes the expected delivery of six Boeing 777Fs and 16 Boeing 757s, along with investments in information technology, vehicles and facilities in support of the company’s global growth strategy.

“We expect continued improvement in both revenue and earnings in fiscal 2011,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Resumed growth in industrial production and global trade is increasing demand for our transportation services, and yield management remains a top priority across all of our operating companies.  However, we expect the growth in earnings in fiscal 2011 to be constrained by significant increases in fixed pension and volume-related aircraft maintenance expenses, along with higher anticipated healthcare costs.  In addition, our earnings guidance includes increased costs related to the planned reinstatement of various employee compensation programs.”

The company expects pension and retiree medical expenses to increase approximately $260 million year over year due to a lower discount rate. However, cash contributions to U.S. pension plans are expected to decline from approximately $850 million in fiscal 2010 to approximately $500 million in fiscal 2011.

“We remain fully focused on improving yields, margins, returns and cash flow.  Our cash flow from operations was sufficient to fund our fiscal 2010 capital investments and we expect this to be the case again in fiscal 2011,” said Graf.

FedEx Express Segment

For the fourth quarter, the FedEx Express segment reported:

 • Revenue of $5.88 billion, up 23% from last year’s $4.80 billion
 • Operating income of $413 million, up from an operating loss of
  $136 million a year ago
 • Operating margin of 7.0%, up from (2.8%) the previous year

FedEx International Priority® (IP) average daily package volume increased 23%, led by exports from Asia.  IP revenue per package grew 6% due to higher weight per package, higher fuel surcharges and a favorable exchange rate impact.  U.S. domestic revenue per package grew 8% due to higher fuel surcharges and improved weight per package, while average daily package volume increased 1%.

Operating profit and margin improvements were driven by volume and revenue growth, particularly in higher-margin IP package and freight services.  Results also include the partial reinstatement of certain employee compensation programs and higher aircraft maintenance expenses, primarily due to increased utilization.  Last year’s fourth quarter operating income and margin were negatively impacted by one-time costs of $260 million associated with aircraft-related charges and severance programs.

FedEx Express added a ninth scheduled daily transpacific frequency in April, utilizing the capabilities of Boeing 777F aircraft.  This additional frequency provides needed capacity from Asia to the U.S, and allows best-in-market cut-off times.  Also in April, a third scheduled daily flight was added from Asia to Europe, providing the first-in-market next-day service from Hong Kong to all of Europe.

FedEx Ground Segment

For the fourth quarter, the FedEx Ground segment reported:

 • Revenue of $1.96 billion, up 15% from last year’s $1.70 billion
 • Operating income of $319 million, up 57% from $203 million a year ago
 • Operating margin of 16.3%, up from 11.9% the previous year

FedEx Ground average daily package volume grew 7% in the fourth quarter driven by increases in the business-to-business market and the FedEx Home Delivery service.  Yield increased 5% primarily due to higher fuel surcharges.  FedEx SmartPost average daily volume increased 23%, with yield increasing 6%.

Operating income and margin increased due to higher package yield and volume, as well as lower self-insurance expenses and improved productivity.

FedEx Freight Segment

For the fourth quarter, the FedEx Freight segment reported:

 • Revenue of $1.23 billion, up 30% from last year’s $948 million
 • Operating loss of $36 million, compared with an operating loss of
  $106 million a year ago
 • Operating margin of (2.9%), compared with (11.2%) the previous year

Less-than-truckload (LTL) average daily shipments increased 34% and LTL yield declined 6% year over year due to the effects of discounted pricing.

Operating losses in the quarter were driven by lower yields and higher volume-related costs, as significantly higher shipment levels required increased purchased transportation and other expenses.  The quarter’s operating loss also reflects an $18 million impairment charge related to the goodwill associated with the acquisition of Watkins Motor Lines (now FedEx National LTL).  Last year’s results included $100 million of charges, mostly related to impairment of goodwill associated with the acquisition of Watkins Motor Lines.

FedEx Services Segment

FedEx Services segment revenue for the fourth quarter, which included the operations of FedEx Office, was down 6% year over year, due to the September 1, 2009 realignment of FedEx SupplyChain Systems to the FedEx Express reporting segment and declines in copy product revenues.

Last year’s fourth quarter results for FedEx Services included an $810 million goodwill impairment charge related to the acquisition of Kinko’s (now FedEx Office).

Corporate Overview

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services.  With annual revenues of $35 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand.  Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 280,000 team members to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit

Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs and fourth quarter fiscal 2010 Statistical Book.  These materials, as well as a Webcast of the earnings release conference call to be held at 8:30 a.m. EDT on June 16 are available on the company’s Web site at  A replay of the conference call Webcast will be posted on our Web site following the call.

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, economic conditions in the global markets in which we operate, legal challenges or changes related to FedEx Ground’s owner-operators, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and filings with the SEC.

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