FedEx saw better than expected net profit in the second quarter of the 2015/16 fiscal year and says higher margins and lower cost-cutting were offset by weak industrial production and global trade.
The company reports adjusted net income for its fiscal second quarter (Q2) ending 30 November of $729 million, up 17 per cent from $622 million last year. Revenue for Q2 was $12.5 billion, up from $11.9 billion a year earlier.
In Q2, the FedEx Express segment saw revenue of $6.59 billion, down six per cent from last year’s $7.02 billion. Operating income was $622 million, up 26 per cent from $492 million a year ago.
In Q2, The FedEx Freight segment saw revenue of $1.55 billion, down two per cent from last year’s $1.59 billion. Operating income was $101 million, down 10 per cent from $112 million a year ago.
FedEx chairman, president and chief executive officer, Frederick W. Smith says: “FedEx Corp. posted solid earnings despite continued weakness in industrial production and global trade, and we are making impressive progress toward our goals to increase margins, earnings per share, cash flows, and returns on invested capital.
“A record number of holiday shipments – fuelled by the steady rise of e-commerce – are flowing through the FedEx global networks, and we greatly appreciate the dedication of our 340,000 team members around the world who are delivering outstanding service to our customers.”
The company expects to receive “final, unconditional approval” from the European Union for its takeover bid for TNT in the second half of January. FedEx says it expects to complete the acquisition of the Dutch firm in the first half of 2016.