Headline & subhead:
MEMPHIS, Tenn., September 17, 2018 — FedEx Corp. (NYSE: FDX), a leading provider of courier delivery services, today announced the financial results for the quarterly period ended August 31, 2018.
Company’s Highlights:
GAAP measures:
• Revenue for Q1 2019 increased to $17.1 billion as compared to $15.3 billion in fiscal 2018
• Operating income observed a positive shift from $971 million in 2018 to $1.07 billion in the reported quarter whereas, operating margin remained the same as 6.3%
• Net income increased substantially from $596 million in fiscal 2018 to $835 million in Q1 of fiscal 2019
• Diluted EPS showed a growth from $2.19 to $3.10
Adjusted non-GAAP measures:
• Operating income ascended from $1.09 billion to $1.19 billion
• Operating margin observed a decline of 0.1% to 7.0%
• Net income showed a significant rise from $683 million in fiscal 2018 to $933 million in fiscal 2019
• Diluted EPS increased from $2.51 to $3.46
“We are pleased to report higher first quarter earnings for the fiscal year 2019. I am proud of the FedEx team for the well-rounded execution of our business plan. I feel fortunate that the company was also faced with a suitable economic environment that allowed us to have favorable results,” said Frederick W. Smith, founder, chairman and chief executive officer, FedEx Corp. “We are positive about our prospects for the upcoming year and we appreciate the support provided by our shareholders. I am also thankful to our customers who allow us to be of service to them and provide them with integrated business solutions. These factors have positioned us to remain confident about our goal to achieve an improved operating income of $ 1.5 billion for FedEx Express in fiscal year 2020.”
“The enactment of Tax Cuts and Jobs Act in the fourth quarter of the fiscal year 2018 led to an impact on the results of this quarter. This impact was expected to say the least but we stand by our decision to invest in our team members. That being said, growth was observed throughout all major segments of the company,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “Going forward our focus will be on smooth and steady TNT integrations, increasing investor and customer satisfaction, and delivering financial growth of the company.”
In order to evaluate the performance and financial condition, the company uses various financial and operational metrics, including non-GAAP financial measures. This practice is undertaken to provide investors with additional insights into our performance. The non-GAAP information provided should not be considered exclusively or be substituted for, or considered superior to, the financial information formulated and presented in accordance with GAAP.
Key Financial metrics & results:
Quarterly revenue was reported as $17.1 billion compared to $15.3 billion in fiscal year 2018 with 11.5% year over year increase.
Operating income showed an increase from $971 million in fiscal year 2018 to $1.07 billion in the 2019. On a non-GAAP adjusted basis, operating income ascended by 9.2% year over year to $1.19 billion in this quarter compared to $ 1.09 billion in 2018.
Earnings per share increased from $2.19 in the first quarter of fiscal 2018 to 3.1 in the reported quarter.
During this quarter 2.6 million shares of FedEx’s common stock was acquired by the company at an average price of $238.95.
FedEx express:
Quarterly revenues at FedEx Express (including TNT Express) showed an increase by 9.8% to $9.22 billion despite the rise in freight pounds, fuel surcharges and other factors.
Operating income improved by 14.7% year over year to $367 million
Operating margin increased from 3.8% to 4% in the year-ago quarter.
FedEx Ground:
Revenues increased 13% year over year and came in at $4.8 billion in this reported quarter. This segment also observed:
• 7% rise in average daily package volume
• 6% growth in yields
Operating income increased by 10% to $667 million
Operating margin declined to 13.9% by 40 basis points (bps)
FedEx Freight:
Revenues climbed 18% year over year to $1.96 billion. This segment also observed:
• 8% quarterly increase in revenue per shipment
• 9% quarterly increase in average daily shipments
Operating income was reported as $176 million which shows a 7% increase
Operating margin observed a contraction of 90 bps to 9% in this quarter
2019 Financial Outlook:
FedEx has increased its earnings per share guidance for fiscal 2019. The anticipated range is of $17.20-$17.80, excluding pension adjustments and TNT Express integration expenses.
The company continues to expect 9% increase in revenues and operating margin (excluding TNT Express integration expenses) is anticipated at around 8.5%. Further, the company expects effective tax rate of around 25% while capital expenses are estimated to be $5.6 billion, lower than $5.7 billion incurred in fiscal 2018.
• Expected increase in revenue is 9%
• Operating margin excluding TNT express integration expenses is anticipated to be around 8.5%
• The company expects an effective tax rate of around 25%
• Estimated capital expenses are to be $5.6 billion
Earnings Conference Call details:
The company will hold an earnings conference call on Sunday, September 16th, 2018. It will be webcast live at 5:00 PM EST. Further information about the webcast and related materials are accessible on the FedEx’s investor relations website at www.investors.fedex.com.
Following the call, a recorded replay of the webcast will also be made available to the investors on the aforementioned website.
This conference call will be hosted by Frederick W. Smith, founder, chairman and chief executive officer, Alan B. Graf Jr., executive vice president and chief financial officer, Mickey Foster, vice president of Investor Relations, Dave Bronczek, president and chief operating officer, Mark Allen, executive vice president, general counsel and secretary, Rob Carter, executive vice president, FedEx Information Services and chief information officer, and Raj Subramaniam, executive vice president and chief marketing and communications officer for FedEx Corp.
Caution regarding forward-looking statements:
Certain statements in this press release may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance. Such forward-looking statements
are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, a significant data breach or other disruption to our technology infrastructure, anti-trade measures and changes in international trade policies, our ability to successfully integrate the businesses and operations of FedEx Express and TNT Express in the expected time frame and at the expected cost, changes in fuel prices or currency exchange rates, our ability to match capacity to shifting volume levels, new U.S. domestic or international government regulation, future guidance, regulations, interpretations or challenges to our tax positions relating to the TCJA and our ability to realize the benefits of certain provisions of the TCJA, our ability to effectively operate, integrate, leverage and grow acquired businesses, our ability to achieve our FedEx Express segment profit improvement goal, legal challenges or changes related to owner-operators engaged by FedEx Ground and the drivers providing services on their behalf, disruptions or modifications in service by, or changes in the business or financial soundness of, the U.S. Postal Service, the impact of any international conflicts or terrorist activities and other factors which can be found in FedEx Corp.’s and its subsidiaries’ press releases and FedEx Corp.’s filings with the SEC. Any forward-looking statement speaks only as of the date on which it is made. We do not undertake or assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
About FedEx:
FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $67 billion, the company offers integrated business solutions through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 425,000 team members to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities. To learn more about how FedEx connects people and possibilities around the world, please visit about.fedex.com.
Additional information and operating data are contained in the company’s annual report, Form 10-K, Form 10-Qs, Form 8-Ks, and Statistical Books.
The Investor Relations page of our website, investors.fedex.com, contains a significant amount of information about FedEx, including our Securities and Exchange Commission (SEC) filings and financial and other information for investors. The information that we post on our Investor Relations website could be deemed to be material information. We encourage investors, the media and others interested in the company to visit this website from time to time, as information is updated and new information is posted.
Contact Details:
For investors:
Mickey Foster
Vice President, Investor Relations
901-818-7468
ir@fedex.com
For media:
Jess Bunn
Spokesperson, Investor Relations
901-818-7463
media@fedex.com