FedEx reports 47 percent increase in quarterly earnings

Wednesday, June 23rd 2004, 12:19 pm

By: News On 6

MEMPHIS, Tenn. (AP) _ The FedEx Corp. reported a 47 percent increase in fourth quarter earnings Wednesday, citing continued growth in ground deliveries and international express shipments.

The Memphis-based package delivery company earned $412 million, or $1.36 per share, in the three months ended May 31, up from $280 million, or 92 cents per share, in the same period last year.

The earnings report includes a 1 cent per share cost of a job reduction program and a 4-cent per share benefit for a reduction in the effective income tax rate. Excluding these one-time items, FedEx earned $1.33 per share, matching the consensus forecast of analysts surveyed by Thomson First Call.

As the ground shipping market grows, FedEx is getting a healthy share of that new business as it competes with chief rival Atlanta-based UPS, said analyst Ken Hoexter of Merrill Lynch.

FedEx's ground segment had 12 percent volume growth in the quarter.

``FedEx is gaining some ground because they're growing at a rate faster than UPS,'' Hoexter said.

FedEx revenue rose to $7.04 billion from $5.83 billion a year ago.

Average daily package volume for both FedEx Express and FedEx Ground grew by a combined 7 percent for the quarter. FedEx also said revenue per package increased at Express and Ground, two of the company's major four divisions.

Revenues for FedEx Ground topped $1 billion for the first time in a financial quarter.

Not much growth can be expected in the already mature domestic express business, said Arthur Hatfield, an analyst for Morgan Keegan & Co.

``That's just a fact of life,'' he said. ``But international is where the growth is, and ground is where the growth is. Both of those areas did extremely well.''

For FedEx Express, the company's cargo airline, daily package volume for international priority shipments grew by 12 percent, led by growth in Asia.

For the 2004 fiscal year, FedEx earned $838 million, or $2.76 per share, up from $830 million, or $2.74 per share, in the 2003 fiscal year. Revenue for the year rose to $24.7 billion from $22.5 billion a year earlier.

FedEx forecast earnings of 90 cents to $1 per share for the first quarter of 2005, with earnings per share for the year at $4.20 to $4.40 a share. Analysts are looking for earnings of 80 cents a share in the first quarter and $4.27 a share or the year.