FedEx reported higher quarterly earnings, with year-over-year drops for its FedEx Express segment more than made up for by better performance in its FedEx Ground and FedEx Freight segments, with record operating income for FedEx Ground.

FedEx reported earnings of $1.73 per share for its fiscal fourth quarter, which ended May 31. This includes a previously announced $0.26 charge for retiring aircraft at FedEx Express. Excluding this charge, earnings were $1.99 per share in the fourth quarter, compared to $1.75 a year ago.

"FedEx delivered strong earnings results for fiscal 2012 due to the outstanding performance by FedEx Ground, our new value proposition at FedEx Freight and improved yields across all transportation segments," said Frederick W. Smith, FedEx Corp. chairman, president and CEO. "In fiscal 2013, we will continue our focus on improving our operating efficiencies and our financial performance across all of our businesses, while simultaneously enhancing our service capabilities."

FedEx Express

FedEx Express reported $6.8 billion in in revenue, up 3% year over year, with operating income as $281 million, down 34% from last year, with an operating margin of 4.1%. If you don't take into account the charge for the retiring aircraft, it was still down 3% year over year, at $315 million, for an operating margin of 6.1%. Last fiscal year, the operating margin was 6.5%.

FedEx Ground

The FedEx Ground segment reported quarterly revenue of $2.48 billion, up 9% from last year. Operating income was $494 million, up 18% over a year ago, and the operating margin of 20% was up from 18.4%.

Operating income and margin reached record highs in the quarter primarily due to increased yield and volume. Revenue per package increased 5% primarily due to increased rates and higher extra services.

Average daily package volume grew 3% in the quarter, driven by growth in both FedEx Home Delivery and business-to-business services.

FedEx SmartPost average daily volume increased 16% primarily due to growth in e-commerce. FedEx SmartPost revenue per package increased 7% due to increased rates.

FedEx Freight

FedEx Freight reported revenue of $1.40 billion, up 7% from last year, operating income of $81 million, up 93% from a year ago, and operating margin of 5.8%, up from 3.2% the previous year.

Operating income and margin increased primarily due to higher yield, volume growth and continued improvements in operational efficiencies. Less-than-truckload (LTL) average daily shipments increased 4%.

Effective July 9, FedEx Freight will increase shipping rates by 6.9%. At the same time, it's making some adjustments to its network.