FedEx reported net income in the fourth quarter of fiscal year 2013, ending May 31, 2013, was $303 million, down from $550 million in the fourth quarter of the previous year, ending May 31, 2012.
The quarterly drop included an impairment charge of $100 million to retire 10 aircraft, as well as business realignment costs and aircraft impairment charges. As a result, adjusted net income in the fourth quarter was $679 million, rising year-over-year from $634 million.
Meanwhile, total quarterly revenue for the transportation company was $11.4 billion, improving from $11.0 billion in the same period last year. The FedEx Express segment’s revenue was $6.98 billion, increasing 3 percent from $6.80 billion in the fourth quarter of last year. FedEx Ground recorded quarterly revenue of $2.78 billion, up 12 percent year-over-year, while FedEx Freight’s revenue reached $1.39 billion, 1 percent.
For the total fiscal year 2013, profit was $1.56 billion, declining from $2.03 billion in fiscal year 2012. Annual revenue was $44.3 billion, up year-over-year from $42.7 billion.
The company incurred costs of $496 million during the fourth quarter and $560 million during fiscal year 2013 associated with the business realignment activities. In October 2012, FedEx announced profit improvement programs, which included a voluntary employee separation program. The program was completed during the fourth quarter, and about 3,600 employees vacated their positions on May 31, 2013, in the first phase. About 25 percent of the employees will vacate their positions in the final phase at the end of fiscal year 2014, ending May 31, 2015.
“We remain focused on improving margins and returns in all of our businesses,” said Alan B. Graf, Jr., FedEx’s executive vice president and CFO, in a written statement. “The pace of that improvement is expected to be moderate in fiscal 2014 and then accelerate in fiscal 2015.”
“Our profit improvement program is progressing, but we continue to see the effects of customers selecting lower-rate international services,” Graf continued. “FedEx Express will further decrease capacity between Asia and the United States in July.”