Despite harsh weather conditions, FedEx turns in solid fiscal third quarter earnings results

Despite dealing with the impact of harsh winter weather in February, fiscal third quarter earnings results, for Memphis-based global freight transportation and logistics services providerFedExweathered the storm, in the form of solid results.

Quarterly revenue—at $21.5 billion—rose 18.6% annually, and operating income—at $1.06 billion far outpaced the $483 million reported for the same period last year. Adjusted earnings per share—at $3.47—climbed 146% annually, and beat Wall Street expectations, of $3.21 per share.

FedEx officials said that quarterly operating results saw gains, mainly due to strong volume growth in U.S. domestic residential package and FedEx International Priority services, coupled with pricing initiatives across all rate segments. And they added that these factors were offset, at least partially, by costs supporting strong demand and to expand services, variable compensation expense, higher labor rates, and one fewer workday in the quarter, too.

What’s more, the company said that the weather impact in February cut down tis operating income by around $350 million, adding it had a significant impact on operations at a number of its primary facilities, including the company’s main FedEx Express hub in Memphis, as well as Indianapolis- and North Texas-based FedEx Express hubs.

“As reflected in this quarter's results, continued execution of our strategies is producing strong earnings growth and margin improvement across our company,” said Fred Smith, said FedEx Chairman and CEOFred Smithon the company’s earnings call yesterday. “We expect demand for our unmatched e-commerce and International Express solutions to remain high for the foreseeable future. I'm exceedingly optimistic about the future of FedEx, and again, very grateful to our team members for their hard work.”

史密斯还提到他calle联邦快递如何完成d a historic peak season, in the fiscal third quarter, by leveraging the power of the company’s expanded seven-day-a-week FedEx Ground operations, handling record-breaking volumes throughout the holiday shipping season. And he also observed how FedEx worked diligently to clear the backlog caused by the recent severe winter weather in the U.S., a 50-year event.

Addressing FedEx’s COVID-19 vaccination efforts, Smith said that FedEx team members are continuing to move the world forward with the delivery of COVID-19 vaccines-related ingredients and supplies throughout the U.S., Canada and more than 20 other countries around the world.

“We did a great job on these vaccines during the weather event, too,” he said. “FedEx is prepared to transport now vaccines to more than 220 countries and territories for as long as necessary to help eradicate COVID-19.”

Raj Subramaniam, FedEx President & Chief Operating Officer, said on the call that the fiscal third quarter showed how despite challenging circumstances, the team performed exceptionally well through the biggest peak season in the company's history.

“This included delivering nearly 0.5 billion holiday packages, transporting the first shipment of COVID-19 vaccines here in the U.S., and increasing collaboration across operating companies,” he said. “Our results speak for themselves. In December, we achieved the highest monthly totals in our company's history in both revenue and operating profit. Results in December were different than previous years. We better maximized our available capacity, and…better aligned prices to incremental costs. Peak 2020 was unlike any peak experience before and sets a new standard for future peak seasons.

As for pricing,布里干酪Carere, FedEx, Executive Vice President, Chief Marketing & Communications Officer, said on the call that FedEx continues to actively pursue yield management, product and customer mix strategies.

“Our primary focus is ensuring large customer pricing aligns to their volume distribution,” she said. “We continue to manage capacity at FedEx Ground, prioritizing our highest yielding [same-day delivery] segment, as well as our premium home delivery product. As we plan for peak of fiscal year 2022, our peak surcharges will continue to play a critical role.”

Jerry Hempstead, president of Hempstead Consulting, said that FedEx had a tremendous quarter, in terms of revenue, profit, margin, albeit coming with a caveat.

“But one must reflect back to the same quarter last year when Covid shut the country down, and everything came to a standstill,” he explained. “So annual comps are a little misleading when we understand what took off to be windfall residential deliveries beginning in April.”

Addressing what the rate environment may look like going forward, he was blunt, saying: “From a pricing point of view, for the next 12 months, it may not be fun to be a FedEx customer.”