FEDERAL EXPRESS CORPORATION SECOND QUARTER FISCAL 1997 FINANCIAL RESULTS.MEMPHIS Memphis, city, ancient Egypt Memphis (mĕm`fĭs), ancient city of Egypt, capital of the Old Kingdom (c.3100–c.2258 B.C.), at the apex of the Nile delta and 12 mi (18 km) from Cairo. , Tenn.--(BUSINESS WIRE)--Dec. 12, 1996--Federal Express Corporation today reported net income for the quarter ended November November: see month. 30 of $103.7 million, or $0.90 per share, compared to net income of $89.9 million, or $0.78 per share in last year's second quarter. Revenues for the quarter rose 12 percent to $2,852.4 million from $2,547.0 million a year ago. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $184.9 million compared to $170.9 million, and pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. was $180.4 million compared to $155.0 million a year ago. Commenting on the quarter's results, Executive Vice President and Chief Financial Officer Alan A`lan´ n. 1. A wolfhound. B. Graf, Jr. said, "Fuel prices have remained stubbornly stub·born adj. stub·born·er, stub·born·est 1. a. Unreasonably, often perversely unyielding; bullheaded. b. Firmly resolved or determined; resolute. See Synonyms at obstinate. 2. high and have significantly affected our operating costs operating costs npl → gastos mpl operacionales . These continuing high fuel prices have made it necessary to add a temporary two percent surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. to all express package shipments. The surcharge will be delayed until February 3, 1997 to allow our customers to get through their peak shipping season. "Jet fuel prices are currently about 20 percent higher than in last year's second quarter," Graf continued, "a ten percent increase from the first quarter. The increase in jet and vehicle fuel prices added about $25 million, year-over-year, to the quarter's operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. ." The surcharge will apply to shipments tendered within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (including Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. ) with certain limited exceptions. It will also apply to all U.S. export shipments, except those to the People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. of China and Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. . Customers have been notified of similar surcharges on FedEx(R) International Airport-to-Airport and FedEx International Express Freight(R) services, which were effective on December 1 for freight shipments out of Europe and selected Asian countries Noun 1. Asian country - any one of the nations occupying the Asian continent Asian nation country, land, state - the territory occupied by a nation; "he returned to the land of his birth"; "he visited several European countries" and will go into effect on December 15 for freight shipments originating in the U.S., Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and the remaining parts of Asia, except those to the People's Republic of China and Hong Kong. The company's U.S. domestic operating income for the quarter was $140.8 million on revenues of $2,038.3 million, compared to an operating income of $137.5 million on revenues of $1,820.1 million in last year's second quarter. International operating income for the second quarter was $44.1 million on international segment revenues of $814.1 million. In last year's second quarter, the international segment reported an operating income of $33.4 million on revenues of $726.9 million. Compared to last year's second quarter, sales of aircraft noise-reduction kits contributed an incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. $12 million to the company's operating income. This quarter's operating results also included a $13.5 million benefit from the settlement of a Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. personal property tax matter. Non-operating income included a net gain of $17.1 million from the insurance settlement on a DC10-10 aircraft destroyed by fire in September. The net effect of these two items after adjusting for variable compensation payments and income taxes, was a benefit of approximately $0.11 per share to the quarter's earnings. "The highlight for the quarter," Graf added, "was the 17 percent year-over-year growth in our FedEx International Priority(R) express package volumes. International Priority(R) package revenues now account for more than 20 percent of our total express package revenue and are growing fastest out of Asia and Europe." U.S. domestic package volume growth was 12 percent, year-over-year, and the average revenue per package or yield was down 0.9 percent, while the average cost per package was up 0.3 percent. International airfreight air·freight n. 1. A system of transporting freight by air. 2. The amount charged for transporting freight by air. air pounds, which excludes International Priority(R) express packages, were up 13 percent, year-over-year, and the respective yield per pound was down 10 percent. Federal Express is the world's largest express transportation company, providing fast and reliable services for more than 2.7 million items in 211 countries each working day. The company has over 40,000 drop-off locations, employs approximately 127,000 people and operates more than 560 aircraft, 38,000 vehicles and 500,000 PowerShip(R) and FedEx Ship(TM) automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. systems in its integrated global network. Federal Express reported revenues of $10.3 billion for its fiscal year ended May 31, 1996. -0-
FEDERAL EXPRESS CORPORATION FINANCIAL HIGHLIGHTS
(Unaudited; Current year data is preliminary)
Second Quarter Fiscal 1997
(In millions, except earnings per share and operating data)
Three Months Ended Six Months Ended
November 30 November 30
FINANCIAL RESULTS 1996 1995 1996 1995
Revenues $ 2,852.4 $ 2,547.0 $ 5,544.7 $ 5,000.4
Operating Expenses:
Salaries and
benefits 1,247.2 1,121.0 2,478.6 2,268.6
Rentals and
landing fees 267.2 236.8 520.6 460.0
Depreciation and
amortization 191.0 178.7 381.2 352.8
Fuel 174.5 143.2 328.0 269.6
Maintenance and
repairs 188.4 162.1 369.9 286.6
Other 599.2 534.3 1,151.6 1,042.7
------------ ------------ ------------ ------------
2,667.5 2376.1 5,229.9 4,680.3
Operating Income 184.9 170.9 314.8 320.1
Other Income (Expense):
Interest, net (24.0) (24.1) (45.8) (48.0)
Other, net 19.5 8.2 19.1 12.7
------------ ------------ ------------ ------------
(4.5) (15.9) (26.7) (35.3)
Pretax Income 180.4 155.0 288.1 284.8
Provision for
Income Taxes 76.7 65.1 122.4 119.6
Net Income $ 103.7 $ 89.9 $ 165.7 $ 165.2
Earnings Per Share $ 0.90 $ 0.78 $ 1.44 $ 1.45
Common and Common
Equivalent Shares 115,132 114,520 115,033 113,948
OPERATING DATA
Operating Weekdays 63 63 127 128
AVERAGE DAILY EXPRESS VOLUME
Priority
Overnight(R) 1,204,904 1,062,138 1,148,443 1,040,556
Standard
Overnight(R) 611,326 591,965 618,254 581,946
2Day(SM) 663,570 566,659 618,580 538,714
Overnight Freight(R)/
2Day Freight(SM) 5,144 3,194 4,729 2,935
Total U.S.A. Express
Volume 2,484,944 2,223,956 2,390,006 2,164,151
International
Priority(R) 225,141 192,155 217,127 185,279
Total Average Daily
Express Volume 2,710,085 2,416,111 2,607,133 2,349,430
YIELD PER EXPRESS PACKAGE
Priority
Overnight(R) $14.68 $15.34 $15.00 $15.28
Standard
Overnight(R) 10.83 10.38 10.82 10.30
2Day(SM) 9.32 9.34 9.55 9.45
Overnight Freight(R)/
2Day Freight(SM) 150.09 156.71 151.47 159.06
Total U.S.A. Express
Yield $12.58 $12.70 $12.78 $12.69
International
Priority(R) 41.28 40.94 40.84 40.70
Total Composite
Yield $14.97 $14.94 $15.11 $14.90
Avg. Pounds per
Express Package 7.1 6.6 7.0 6.5
Avg. Revenue per
Express Pound $2.11 $2.27 $2.17 $2.29
INTERNATIONAL AIRFREIGHT
(IXF/ATA)
Millions of Pounds 173.0 153.0 322.7 285.3
Revenue per Pound $0.94 $1.04 $0.93 $1.06
CONTACT: Federal Express Corp., Memphis Greg Rossiter (Media), 901/395-4440 Shirlee Clark (Media), 901/395-3463 Tom Holland (Investor), 901/395-3468 or Worldwide Web Home Page: http://www.fedex.com |
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