FedEx has seen total revenue increase by $65 million to $14.66 billion, while net profit rose 3.3 per cent to $715 million in the first quarter of the fiscal 2017 year, ending 31 August.
TNT Express didn’t add any profitability in the quarter, but it did contribute an additional $1.8 billion in revenue. FedEx Express revenue increased 1.1 percent to $6.6 billion on improved base yields, higher package volume and increased freight pounds.
The integrator also says the full integration of TNT Express should take four years and will result in $750 million in annual savings.
The FedEx Freight segment saw revenue rise four per cent to $1.66 billion, up from $1.6 billion in the same quarter last year.
FedEx chairman, president and chief executive officer, Frederick W. Smith says: “The integration of TNT Express is proceeding smoothly, and the level of team members’ engagement is outstanding.
“Managing our operating companies as a portfolio of customer solutions helped FedEx achieve strong financial and operating results in the quarter, especially given the global economy’s continued low growth.”
FedEx expects to get a boost globally from the $4.8 billion TNT Express deal. It incurred $68 million in TNT Express-related integration costs, along with an additional $28 million in intangible asset amortisation expenses in the first quarter.
FedEx executive vice president and chief financial officer, Alan B. Graf explains: “Our team is extremely excited about the TNT Express integration, and we are discovering many possibilities for achieving high returns.
“As we integrate these networks and take advantage of the unmatched road capabilities of TNT Express, I am confident there is going to be a tremendous opportunity to increase the earnings of FedEx Corporation.”
As previously announced, effective 2 January. 2017, FedEx Express will increase shipping rates by an average of 3.9 per cent, while FedEx Ground, FedEx Home Delivery and FedEx Freight will increase shipping rates by an average of 4.9 per cent.