FedEx Corp. (NYSE: FDX) reported earnings of $2.46 per diluted share for the fourth quarter ended May 31. Last year’s fourth quarter earnings were $2.13 per diluted share, excluding a $0.98 per diluted share business realignment program charge and a $0.20 per diluted share noncash aircraft impairment charge at FedEx Express. Including last year’s charges, earnings were $0.95 per diluted share.
“An outstanding fourth quarter helped FedEx post solid results for fiscal 2014, and we believe we are well positioned for a strong fiscal 2015,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “I would like to extend my sincere appreciation to the entire FedEx team for their contribution to our results and their continued commitment to providing outstanding service to our customers and connecting people and possibilities around the world.”
For fiscal 2015, FedEx projects earnings to be $8.50 to $9.00 per diluted share. The outlook assumes no net year-over-year fuel impact and continued moderate economic growth. Capital spending for fiscal 2015 is expected to increase to approximately $4.2 billion, which includes planned aircraft deliveries to support the company’s fleet modernization program and continued expansion of the FedEx Ground network.
“Fiscal 2014 was a good year for FedEx and we expect fiscal 2015 to be even better,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “With continued modest economic improvement, our results in fiscal 2015 should benefit from base performance improvement and ongoing execution of our profit improvement initiatives at FedEx Express, continued profitable growth at FedEx Ground and FedEx Freight, and our share repurchase program. We remain committed to improving earnings, cash flows, returns on invested capital and returns to shareowners, with the most recent example of the latter being our announced 33% increase in the quarterly dividend.”
The FedEx Freight Segment saw big growth year-to-year, up 12 percent from a revenue of $1.39 billion to $1.55 billion. Less-than-truckload (LTL) average daily shipments grew 12%, including a 14% increase in demand for Priority service. Weight per shipment grew 2%, driving a 1% increase in revenue per shipment. Operating results improved due to the positive impacts of higher average daily shipments, higher weight per shipment and improved operational efficiencies, partially offset by one fewer operating day.
FedEx stocks were upgraded to buy due to higher growth and earnings across the board.