FedEx Corp. Wednesday posted solid fiscal 2010 fourth-quarter results, with only a subpar performance from its less-than-truckload (LTL) services unit clouding an otherwise impressive operating quarter.
The company cautioned, however, that the earnings outlook for its 2011 fiscal year is likely to be constrained by higher pension and health-care costs, and increased aircraft maintenance expenses. The dimmer earnings picture for the current fiscal year sent FedEx stock down nearly $5 in very active trading today on the New York Stock Exchange.
The Memphis, Tenn.-based company posted revenue of $9.43 billion, up 20 percent from the year-earlier period. Operating income rose to $696 million, compared to an operating loss of $849 million last year. For its full 2010 fiscal year, FedEx reported revenue of $34.7 billion, down 2 percent from prior-year figures.
FedEx's air unit, FedEx Express, showed a 23-percent revenue gain in the fiscal fourth quarter, paced by its international service, which showed a 23-percent gain in average daily package volume. FedEx's ground parcel division, FedEx Ground, posted a 15-percent revenue gain, with a 7-percent increase in daily package volumes.
FedEx Freight, the company's LTL unit, reported a 30-percent gain in revenue and a 34-percent increase in daily shipments. The division reported a $36 million operating loss, compared to a $106 million loss in the year-earlier period. Yields, or revenue per-pound, fell by 6 percent due to the effects of ongoing price wars in the segment, FedEx said.
Company executives said they expect continued improvement in revenue and earnings in the current fiscal year as a global economic recovery fuels demand for the company's transportation services.