FedEx reports record profits

FedEx Corporation’s latest financial results show that fleets can increase profits sharply, despite rising fuel costs. The company reported a better-than-expected 27% rise in net income for the period.

“FedEx posted record financial results in the fourth quarter and full year, as we ended our fiscal 2006 in an environment of solid economic growth in the U S and in international markets,” said Frederick Smith, chairman, president and chief executive officer. “We remain optimistic about the global economic environment for fiscal 2007 and our ability to effectively manage our business.”

FedEx Corp. reported the following consolidated results for the fourth quarter:

• Revenue of $8.49 billion, up 10% from $7.72 billion the previous year
• Operating income of $927 million, up 25% from $740 million a year ago
• Operating margin of 10.9%, up from 9.6% the previous year
• Net income of $568 million, up 27% from last year’s $448 million

Total combined average daily package volume at FedEx Express and FedEx Ground grew approximately 4% year over year for the quarter, led by continued growth in ground and international express shipments.

On May 26, FedEx Corp. announced an agreement to acquire the less-than-truckload freight operations of Watkins Motor Lines and certain affiliates for $780 million, payable in cash. The transaction is expected to close during the first quarter of fiscal 2007 and is subject to customary conditions, including government approvals.

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