FedEx blames winter storms in Q3 report
FedEx Corp. reported revenue of US$11.3 billion (8.2 billion euros) for the third quarter, up 3 percent from the same period in 2013.
Unusually severe winter storms throughout the quarter disrupted operations, decreasing shipping volume and increasing costs, and affected year-over-year operating income by an estimated US$125 million (90.7 million euros).
“Historically severe winter weather significantly affected our third-quarter earnings,” said Frederick W. Smith, FedEx Corp. chairman, president and CEO. “On days when the weather was closer to normal seasonal conditions, our volumes were solid and service levels were high. The FedEx strategy of maintaining separate express and ground networks with multiple hubs proved to be an especially important advantage for our package customers during this quarter’s severe weather and peak shipping.”
For the third quarter, FedEx Express reported revenue of US$6.67 billion (4.84 billion euros), down slightly from last year’s US$6.70 billion (4.86 billion euros).
Revenue decreased slightly due to lower freight revenue, lower fuel surcharges and the effect from weather.
For the third quarter, FedEx Freight reported revenue of US$1.35 billion (980 million euros), up 9 percent from 2013.
FedEx Freight will increase certain U.S. and other shipping rates by an average of 3.9 percent, effective March 31.
“The US$1.6 billion profit improvement plan at FedEx Express remains on track despite the near-term impact of weather,” said Alan B. Graf, Jr., FedEx Corp. executive vice president and CFO. “Our accelerated stock repurchase program initiated in January reflects our confidence in achieving our financial goals.”