FedEx Corp. reported a 27 percent increase in fourth-quarter earnings, citing solid economic growth in U.S. and international markets. Net income rose to $568 million, up from $448 million a year ago. Revenue totaled $8.49 billion, up 10 percent from $7.72 billion the previous year, the company announced Wednesday, June 21.
Total combined average daily package volume at FedEx Express and FedEx Ground grew about 4 percent year-over-year for the quarter, led by continued growth in ground and international express shipments. The company says it sees continued growth in FedEx International Priority, U.S. domestic overnight express box, FedEx Ground and FedEx Freight shipments and improving operating margins in the transportation segments.
“We remain optimistic about the global economic environment for fiscal 2007 and our ability to effectively manage our business,” says Frederick W. Smith, chairman, president and chief executive officer of Memphis, Tenn.-based FedEx.
Capital spending for fiscal 2007 is forecast to be about $2.9 billion, of which about 75 percent is targeted for growth. Investments in the global network at FedEx Express and the transportation networks at FedEx Ground and FedEx Freight will continue to add capacity and new technologies, and the company says FedEx Kinko’s will initiate a multiyear network expansion program to increase retail locations for customer access to FedEx Kinko’s business services and the FedEx Express and FedEx Ground shipping networks.
“FedEx will significantly invest in growth opportunities in fiscal 2007,” says Alan B. Graf Jr., executive vice president and chief financial officer. Graf pointed to the company’s acquisition of Watkins Motor Lines for $780 million, announced in May, and its expansion of operations in China.