William B. Cassidy | Sep 22, 2011 1:48PM EDT
Strong performances by its package delivery and industrial trucking divisions gave FedEx lift lacking in its international air operations in the last quarter.
In the quarter that ended Aug. 31, FedEx Ground increased revenue 16 percent to $2.3 billion, while its operating profit soared 42 percent to $407 million. FedEx Express, in comparison, increased revenue 12 percent to $6.6 billion and saw its operating profit decline 19 percent, from $357 million to $288 million.
FedEx Express revenue rose by $680 million, while FedEx Ground sales rose by $320 million. But the ground division got more profit out of each dollar. FedEx Ground had a 17.9 percent operating margin, compared with 14.6 percent a year ago, while FedEx Express saw its margin shrink from 6 to 4.4 percent.
On the trucking side, FedEx Freight increased sales 6 percent to $1.3 billion and enjoyed a $42 million operating profit, compared with a $16 million loss a year ago.
FedEx Ground increased average daily package volume 5 percent, as business and home delivery demand increased. Revenue per package was up 9 percent.
FedEx Freight shipment volume fell 7 percent as the nation’s largest less-than-truckload carrier culled less profitable freight from its network.
The LTL carrier’s revenue per hundredweight, or yield, increased 11 percent, partly because of higher fuel surcharges and partly because of better yield management.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc
