FedEx Corp. today released its earnings report for the quarter ended Feb. 29, stating that operating income rose 38% to $372 million over the same period last year. This increase is attributed to cost cuts and an improved world economy, the company said.
FedEx’s air transport arm, FedEx Express, has netted $4.37 billion in revenues— a 7% increase over the same quarter last year. Operating income improved dramatically which earned $218 million— a 68% jump. This is a result of cost cutting efforts including early retirement and severance savings.
FedEx Express delivers an average of 3,221 packages daily, which accounts for 58.4% of total packages delivered. Overall volume for FedEx’s air delivery increased only 1%, while average revenue per package increased to $18.43 (6%).
FedEx Ground has also grown, with an 8% increase in revenue, to $960 million. Operating income showed a more modest growth of 3%, to $112 million. These increases indicate that it is keeping pace with its volume growth, which increased 6%, to 2,296 packages delivered per day. FedEx Ground accounts for 41.6% of packages delivered per day. Each ground package earns average revenues of $6.52 per package— a 4% increase.
The Freight segment has also shown strong growth, with revenues of $630 million— up 11%. Operating income took a 32% jump, to $37 million. The sharp increase is attributed to higher revenue and cost-cutting efforts.
“Our revenue growth accelerated, reflecting a strengthening worldwide economy and a successful execution of our business strategy,” said Alan B. Graf Jr., FedEx executive vp and CFO.