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FedEx operating income was $962 million, up 50%

Staff writer |
FedEx Corp. reported earnings of $2.01 per diluted share for the third quarter ended February 28, compared to $1.23 per share last year. Revenue of $11.7 billion, up 4% from $11.3 billion the previous year.

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Operating income was $962 million, up 50% from $641 million last year. Operating margin of 8.2%, up from 5.7% the previous year. Net income of $580 million, up 53% from last year's $378 million.

Operating results improved due to volume and base yield growth in all three transportation segments, a significant net benefit from fuel, benefits from profit improvement program initiatives, a lower year-over-year weather impact and reduced pension expense. These improvements were partially offset by higher variable incentive compensation accruals.

Share repurchases had a $0.11 year-over-year positive impact on third quarter earnings per diluted share.

FedEx projects earnings to be $8.80 to $8.95 per diluted share for fiscal 2015. This outlook assumes continued moderate global economic growth. The capital spending forecast for fiscal 2015 remains $4.2 billion.

"We expect continued revenue and earnings growth this year, driven by ongoing improvements in all of our transportation segments," said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer.

"Variable incentive compensation accruals will continue to increase as our financial performance improves, and we expect to deliver record fourth quarter and fiscal year earnings."

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