Summary
FedEx Corporation reported a 19% increase in revenue for the third quarter and the first nine months of fiscal year 2017, largely driven by the acquisition of TNT Express. While consolidated operating income saw a 19% rise in the quarter, it was relatively flat for the nine-month period, indicating that the integration costs and other factors are impacting profitability. The company continues to invest heavily in capital expenditures, with a notable increase driven by the TNT Express integration and expansion at FedEx Ground. Despite these investments and the associated integration expenses, FedEx maintained a stable consolidated operating margin of 6.8% for the quarter. Investors should note the ongoing integration efforts for TNT Express, which are expected to incur significant costs through fiscal year 2020, but also present opportunities for future synergies and efficiency gains.
Financial Highlights
42 data points| Revenue | $15.00B |
| Operating Expenses | $13.97B |
| Operating Income | $1.02B |
| Net Income | $562.00M |
| EPS (Basic) | $2.11 |
| EPS (Diluted) | $2.07 |
| Shares Outstanding (Basic) | 266.00M |
| Shares Outstanding (Diluted) | 271.00M |
Key Highlights
- 1Revenue increased by 19% to $14.997 billion in Q3 FY17 and to $44.591 billion for the nine months ended Feb 28, 2017, primarily due to the inclusion of TNT Express.
- 2Consolidated operating income grew by 19% to $1.025 billion in Q3 FY17, but for the nine months, it increased by 10% to $3.456 billion, showing slower growth over a longer period.
- 3Integration expenses related to the TNT Express acquisition were $78 million in Q3 FY17 and $204 million for the nine months, impacting profitability.
- 4Capital expenditures increased by 11% to $1.109 billion in Q3 FY17 and by 6% to $3.790 billion for the nine months, driven by TNT Express integration and FedEx Ground expansion.
- 5FedEx Express segment's operating income decreased by 7% in Q3 FY17, impacted by fuel costs and fewer operating days, though it saw a 3% increase year-to-date.
- 6FedEx Ground segment's operating income decreased by 8% in Q3 FY17 and by 2% for the nine months, affected by network expansion costs and unfavorable fuel impacts.
- 7The company expects ongoing integration costs for TNT Express to be approximately $300 million in fiscal year 2017, with the total program expense estimated at $800 million over four years.