FedEx fiscal profits soar 25%

Package delivery giant FedEx Corp. today announced its fiscal fourth quarter net income jumped 27% to $568 compared with the same quarter last year

Package delivery giant FedEx Corp. today announced its fiscal fourth quarter net income jumped 27% to $568 compared with the same quarter last year. For the full fiscal year ended May 31, profits increased 25% to $1.81 billion compared with 2005.

The company credited its recent success with “solid economic growth” both in the U.S. and international markets.

For the quarter, FedEx Express and FedEx Ground posted a combined average daily package volume increase of 4% compared with 4Q 2005, led by growth in ground and international express shipments.

FedEx expects to complete its pending $780 million cash transaction to acquire the LTL operations of Watkins Motor Lines before its fiscal first quarter ends on Aug. 31.

FedEx’s LTL arm, FedEx Freight, saw yields improve 9% year-over-year (YOY) on increasing fuel surcharges and higher rates. A 5.95% rate increase was implemented on April 24, the company noted. Average daily LTL shipments increased 8% YOY due to greater demand for regional and interregional services.

For the full year, FedEx Freight posted an operating income of $142 million, which was up 49% from a year ago. Revenue increased a more modest 15% to $973 million and its operating margin was up to 14.6% from 11.3% in 2005.

“We remain optimistic about the global economic environment for fiscal 2007 and our ability to effectively manage our business,” stated chairman, president & CEO Frederick W. Smith.

FedEx expects fiscal 2007 earnings to fall between $6.45 and $6.80 per diluted share—which would be at least 10% above $5.83 in FY 2006. The company set its 1Q earnings guidance to be between $1.45 and $1.60 a share.

For more information, go to http://www.fedex.com/us/investorrelations/financialinfo/releases/Q4FY06.html?link=4

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