FedEx Corp reported a year-on-year improvement for the first quarter yesterday. Consolidated results showed a 2% increase in total revenue from $10.8 to $11 billion and a 7% rise in operating income from $742 million to $795 million. FedEx CEO Frederick Smith said overall growth in demand was the main cause of the company's recent success.
FedEx Express, the parcel delivery division and by far the largest part of the business, saw a slight 0.3% decrease in revenue from $6.63 to $6.61. This was attributed to lower fuel surcharge revenue and one fewer operating day. Nevertheless, operating income for the division was up 14%year-on-year from $207 to $236 million.
While US domestic volume and revenue was flat, export volume grew 4% - with most of this coming from the lower end delivery services: FedEx International Economy grew 15% while FedEx International Priority saw a slight decline.
Speaking of the results, CFO Alan Graf Jr. commented,“We remain confident in our full year earnings outlook despite tepid global economic growth. FedEx Express continued to execute on its profit improvement initiatives during our first quarter. We remain focused and are committed to FedEx Express achieving its $1.6 billion operating profit improvement target by the end of fiscal 2016.”
FedEx Ground, the division for day definite delivery across North America, reported an 11% increase in revenue from $2.46 to $2.73 billion, while the FedEx Freight Segment saw a relatively modest revenue increase of 2% from $1.4 to $21.42 billion.