Trucking and parcel delivery company FedEx Corp. released on Tuesday its fiscal second quarter numbers showing significant hikes in both earnings and revenue.
Net income totaled $775 million, or $2.84 per share, compared to net income a year earlier of $700 million, or $2.59 per share. These latest numbers reflect the estimated negative impact of the June 27 cyberattack that affected the company’s TNT Express business, which totaled 31 cents per share.
Adjusted earnings in the fiscal 2018 second quarter totaled $3.18 per share, better than an advance estimate from analysts, who forecast a consensus of $2.87 per share. Adjusted earnings exclude integration expenses for the Netherlands-based TNT Express, which FedEx acquired in 2016
Revenue for the company in the most recent quarter increased to $16.3 billion from $14.9 billion while operating income grew to $1.26 billion from $1.17 billion.
“Strategic execution by the FedEx team and a stronger global economy drove improved financial results, and we are well positioned for profitable, long-term growth,” said Frederick W. Smith, FedEx Corp. chairman and CEO, who also noted the company is on track for another record holiday-shipping season.
The FedEx Freight segment saw quarterly revenue improve 10% to $1.76 billion while operating income increased 34% to $118 million.
According to the company, revenue increased due to less-than-truckload (LTL) revenue per shipment growth of 7% and average daily LTL shipment growth of 4%. Operating results improved primarily due to the benefit from higher LTL revenue per shipment.
FedEx Express reported operating revenue increased to $9.35 billion from $8.64 billion as operating income moved 2% higher to $717 million.
The company said revenue grew primarily due to higher base rates, strong growth in international services, higher fuel surcharges and favorable exchange rates, partially offset by the impact from the TNT Express cyberattack.
Operating income increased due to higher revenue, a favorable net impact from fuel and continued cost efficiencies, partially offset by an estimated $100 million affect from the cyberattack and the timing of aircraft maintenance events. The results include $96 million of TNT Express integration expenses.
FedEx Ground saw both revenue and operating income each improve by 12%. The hike in revenue was due to average daily package volume growth of 7% and higher base rates. Operating results improved due to revenue growth, partially offset by higher purchased transportation, network expansion and staffing costs and increased self-insurance reserves.
Looking ahead, FedEx said it sees its financial picture improving even more.
“We are increasing our fiscal 2018 forecast, due to enhanced revenue quality, solid demand trends and our success in restoring business impacted by this summer’s cyberattack,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and chief financial officer. “We expect to see improved results in our fiscal second half, and we reaffirm our commitment to improve operating income at the FedEx Express segment by $1.2 to $1.5 billion in fiscal 2020 versus fiscal 2017.”
See all comments