FedEx\u2019s second fiscal-quarter operating income increase of 3 percent underperformed analysts\u2019 expectations as they failed to account for the integrator\u2019s US$2 billion investment into sorting hubs and distribution centers, and automation of ground operations to accommodate growing e-commerce shipments.
\nThe Ground and Freight divisions saw operating income fall by 12 and 13 percent, respectively, to $465 million and $88 million. FedEx attributed declines in the Ground segment to \u201chigher rent, depreciation and staffing, as a result of network expansion, and increased purchased transportation rates.\u201d In Freight, the decline was a product of lower average weight per shipment and \u201chigher information technology expenses,\u201d the company said.
\nThe Memphis-based integrator\u2019s Express segment, which accounts for the majority of total operating income, saw its operating profits rise by 2 percent to $636 million, which was enough to offset losses in other segments, but not enough to satisfy analysts.
\nFedEx explained that operating results improved due to \u201cincreased base rates and ongoing cost efficiencies.\u201d The company also noted that, \u201cresults include $18 million of TNT Express integration expenses,\u201d and that fuel and currency exchange rates \u201chad a minimal impact on the quarter\u2019s results.\u201d
\nTNT Express, which FedEx purchased at the start of the 2016 calendar year, contributed $70 million in operating income and $1.9bn in revenues.
\nChief Financial Officer Alan Graf called the decline in the unit\u2019s profit margins \u201ca bit shocking,\u2019\u2019 but insisted that the investments needed time to play out. Results will \u201cpop back up\u2019\u2019 on the back of growing volume in the expanded Ground business, FedEx CEO Fred Smith said.
\nSource: aircargoworld<\/p>\n","protected":false},"excerpt":{"rendered":"
FedEx\u2019s second fiscal-quarter operating income increase of 3 percent underperformed analysts\u2019 expectations as they failed to account for the integrator\u2019s US$2 billion investment into sorting hubs and distribution centers, and automation of ground operations to accommodate growing e-commerce shipments. The Ground and Freight divisions saw operating income fall by 12 and 13 percent, respectively, to[…]<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[49],"class_list":["post-2061","post","type-post","status-publish","format-standard","hentry","category-news","tag-airport-code"],"_links":{"self":[{"href":"https:\/\/www.actlogistics.vn\/vn\/wp-json\/wp\/v2\/posts\/2061","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.actlogistics.vn\/vn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.actlogistics.vn\/vn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.actlogistics.vn\/vn\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.actlogistics.vn\/vn\/wp-json\/wp\/v2\/comments?post=2061"}],"version-history":[{"count":0,"href":"https:\/\/www.actlogistics.vn\/vn\/wp-json\/wp\/v2\/posts\/2061\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.actlogistics.vn\/vn\/wp-json\/wp\/v2\/media?parent=2061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.actlogistics.vn\/vn\/wp-json\/wp\/v2\/categories?post=2061"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.actlogistics.vn\/vn\/wp-json\/wp\/v2\/tags?post=2061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}