Earnings Watch: FedEx Surges, Daseke Rebounds
Parcel and trucking giant FedEx posted a big gain in profits during its most recent quarter, while Daseke, the owner of several flatbed and specialized carriers, moved from a loss to a profit in both the final quarter of 2017 and for all of last year.
FedEx Corp. reported net income compared to a year ago more than tripled in its fiscal third quarter ending Feb. 28, totaling $2.07 billion, as earnings per share rose to $7.59 from $2.07.
Revenue in this most recent quarter grew to $16.5 billion from $15 billion a year earlier.
The net results include a tax benefit of $1.53 billion, or $5.60 per share, due to the Tax Cuts and Jobs Act passed by Congress late last year.
FedEx said it benefited from higher base rates, increased volume at FedEx Ground and FedEx Freight, and favorable fuel prices. The results were negatively affected by significantly higher variable compensation accruals, increased peak-related costs at FedEx Express, and adverse weather.
The FedEx Freight segment saw operating income improve 34% from a year ago to $55 million as revenue increased 14% to $1.69 billion.
Revenue increased due to less-than-truckload revenue per shipment growth of 8% and average daily LTL shipment growth of 6%, according to the company. Operating results improved primarily due to the benefit from higher LTL revenue per shipment, partially offset by higher variable compensation accruals.
The FedEx Express segment saw operating income decline 24% to $424 million despite higher revenue. This was attributed to an additional $170 million in costs in several forms, including its integration of TNT Express, adverse weather, and increased peak-related costs.
FedEx Ground reported revenue increased 11% to $5.22 billion as operating income moved 23% higher to $634 million. Strong revenue growth was driven by average daily package volume growth of 6% and higher base rates.
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