10-QPeriod: Q2 FY2015

FEDEX CORP Quarterly Report for Q2 Ended Nov 30, 2014

Filed December 18, 2014For Securities:FDX

Summary

FedEx Corporation's (FDX) Form 10-Q for the period ending November 30, 2014, reveals a strong quarter driven by revenue growth across its transportation segments. The company reported increased revenues and operating income, signaling a positive trajectory aided by higher volumes and improved yields. This performance reflects the ongoing benefits of profit improvement initiatives and a favorable net impact from fuel costs, partially offset by increased maintenance expenses. Financially, FedEx maintained a solid balance sheet with significant property and equipment and substantial retained earnings. The company also demonstrated a strong commitment to returning value to shareholders through dividends and share repurchases. Looking ahead, FedEx expressed confidence in continued revenue and earnings growth, supported by moderate global economic expansion and ongoing strategic improvements, while also acknowledging the potential impacts of fuel prices and global economic conditions.

Financial Highlights

40 data points
Beta

Revenue

$11.94B

Net Income

$663.00M

5.6% Net Margin

EPS (Diluted)

$2.31

Total Assets

$32.98B

Cash & Equivalents

$2.27B

Free Cash Flow

$1.17B

Financial Statements
Beta
Revenue$11.94B
Operating Expenses$10.85B
Operating Income$1.09B
Net Income$663.00M
EPS (Basic)$2.34
EPS (Diluted)$2.31
Shares Outstanding (Basic)283.00M
Shares Outstanding (Diluted)287.00M

Key Highlights

  • 1Consolidated revenues increased by 5% year-over-year for both the three and six-month periods ending November 30, 2014, reaching $11.9 billion and $23.6 billion, respectively.
  • 2Operating income saw a substantial increase of 22% for the three-month period and 23% for the six-month period, indicating improved profitability.
  • 3Diluted earnings per share grew significantly by 36% for the three-month period and 37% for the six-month period, demonstrating enhanced shareholder value.
  • 4FedEx Express segment revenue increased by 3% year-over-year, driven by U.S. domestic volume growth and international export revenue, with operating income up 36% in the quarter.
  • 5FedEx Ground segment revenue rose by 8% year-over-year due to higher volumes and yields, with operating income up 6% in the quarter and 10% year-to-date.
  • 6FedEx Freight segment revenue increased by 11% year-over-year, driven by higher shipments and revenue per shipment, leading to a 35% increase in operating income for the quarter.
  • 7The company announced two strategic acquisitions: GENCO Distribution Systems, Inc. to expand e-commerce and supply chain solutions, and Bongo International, LLC for cross-border enablement technologies.

Frequently Asked Questions

FedEx Corporation reported a 5% increase in consolidated revenues for the three months ended November 30, 2014, reaching $11.9 billion, compared to $11.4 billion in the prior year period. This growth was driven by increased revenues across all transportation segments.

Net income for the three months ended November 30, 2014, was $616 million, a 23% increase from $500 million in the prior year. Diluted earnings per share rose by 36% to $2.14, up from $1.57 in the same period last year.

FedEx is involved in several legal proceedings, notably including lawsuits challenging the independent contractor status of its FedEx Ground owner-operators. While the company believes its owner-operators are correctly classified, adverse determinations could potentially be material. Other legal matters related to environmental issues, cigarette shipments, and antitrust concerns are ongoing, with potential losses in most cases expected to be immaterial.

FedEx expects continued revenue and earnings growth into the third quarter and the remainder of fiscal year 2015, driven by improving global economic conditions, higher volumes, and yield improvements across its transportation segments. The company also anticipates benefits from its ongoing profit improvement programs and lower pension expenses.