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FEDERAL EXPRESS REPORTS THIRD QUARTER FY92 FINANCIAL RESULTS

 FEDERAL EXPRESS REPORTS THIRD QUARTER FY92 FINANCIAL RESULTS
 MEMPHIS, March 16 /PRNewswire/ -- Federal Express Corporation (NYSE: FDX) announced today its financial results for the third fiscal quarter ended Feb. 29, 1992, which include a charge for restructuring its operations in the United Kingdom and continental Europe. While quarterly revenues increased 1 percent to $1,889.6 million from $1,864.5 million a year ago, the company posted an operating loss of $250.6 million, a pre-tax loss of $298.0 million and a per-share loss of $3.58. International operating losses for the quarter were $386.9 million on revenues of $594.7 million.
 Excluding the unusual items discussed below for both the current and prior year's third quarter results, revenues increased approximately 1 percent to $1,904.9 million from last year's $1,885.4 million while operating expenses rose 2 percent resulting in operating income of $18.7 million, 55 percent lower than last year's $41.8 million. Also exclusive of the unusual items, pre-tax income declined from a loss of $5.4 million to a loss of $28.7 million, net income declined from a loss of $0.7 million to a loss of $15.4 million, and earnings per share declined from a loss of $0.01 per share to a loss of $0.28.
 The company reported, also excluding unusual charges, international revenues of $602.1 million during the quarter compared with $672.3 million in the third quarter last year, and an international operating loss of $125.5 million this year compared with a $70.6 million operating loss in the comparable quarter last year.
 Unusual charges in this year's third quarter were a $254.0 million charge to operating expense related to a restructuring of the company's European operations and a $15.3 million downward adjustment to revenues to comply with an accounting change. A charge of $121.0 million had been made to operating expense in last year's third quarter related to the downsizing of Federal Express' United Kingdom operations. Last year's financial results also included a $32.0 million pre-tax loss contingency provision arising from the failure of a vendor, Hamilton Taft & Company, to remit withholding taxes on behalf of Federal Express and a net $10.3 million change to operating income following the reversal of aircraft noise reduction kit sales that had been reported in previous quarters' results.
 The table below compares the current quarters revenues, expenses and unusual charges with the same quarter last year:
 FEDERAL EXPRESS CORPORATION
 Quarter 3 Quarter 3 Percent
 FY 1992 FY 1991 Change
 Revenue before adjustments $1,904.9 $1,885.4 1.0
 Revenue adjustments due to:
 Accounting change (15.3) -- --
 Noise kit reversal -- (20.9) --
 Revenue 1,889.6 1,504.5 1.3
 Operating expense before
 unusual items 1,886.2 1,843.6 2.3
 Restructuring charge 254.0 121.0 --
 Noise kit reversal -- (10.6) --
 Operating expense 2,140.2 1,954.0 9.5
 Operating loss (250.6) (89.5) --
 Other income (expense) (47.4) (47.2) --
 Payroll tax loss contingency -- (32.0) --
 Pre-tax loss (298.0) (168.7) (76.6)
 Credit for income taxes (104.6) (63.1) --
 Net loss (193.4) (105.6) (83.1)
 Loss per share $(3.58) $(1.98) (80.8)
 The $15.3 million charge against this year's third quarter revenues was made in order to conform to newly-adopted guidelines issued by the Financial Accounting Standards Board's Emerging Issues Task Force. The one-time, non-cash charge aligns the timing of revenues and expenses in accordance with the ruling. Previously, Federal Express had recorded revenues at the time of pick-up and recorded expenses as incurred. For the current and future periods, revenues will be recorded on an allocated basis according to the percent of delivery completed in the period. The company said that the $15.3 million adjustment included a $7.4 million adjustment to international revenues.
 Elaborating on the restructuring, the company said it is reducing the scope of its European operations, effective May 4, 1992, to provide direct intercontinental service to and from 16 cities in the United Kingdom and continental Europe. Intercontinental service to locations outside these 16 cities, it said, will be provided through agreements with several other international and local operators, and intra-regional and intra-country service in Europe will be discontinued.
 The company announced that major operating agreements were concluded with Securicor Omega Express Limited and with TNT Express Worldwide through its Dutch holding company TNT Express Europe N.V., and that it had reached agreement for the sale of its domestic French operations to TNT Chrono Service S.A., a member company of the TNT Limited Group.
 -- Under the agreement with Securicor Omega Express Limited, Securicor will purchase certain of Federal Express' assets and assume service to Federal's domestic U.K. parcels business customer base. Securicor will also pick up and deliver Federal's international traffic to and from most locations in the U.K. not directly served by Federal Express. Securicor Omega Express is the U.K.'s largest independent carrier of overnight parcels.
 -- Pursuant to the agreement with TNT Express Europe N.V., that company, through its local affiliates, will serve as Federal Express' agent for the delivery of shipments to locations in ten countries in Europe not directly served by Federal Express. TNT Express Worldwide is the operating organization under a joint venture agreement between TNT Limited and GD Net B.V. (a consortium of five national postal authorities) which is expected to be completed shortly.
 -- Under the agreement with TNT Chrono Service S.A., that company will purchase Federal Express' "Chronoservice" business which was acquired by Federal Express in 1990. TNT Chrono Service S.A. is owned by TNT Limited, a diversified international transportation company headquartered in Sydney, Australia.
 Financial terms of the agreements were not disclosed. Federal Express stated that the agreements with these entities were subject to applicable regulatory approvals before becoming effective.
 Federal Express cautioned that its international business remains subject to numerous variable factors, including the economies of major markets currently in recession and softness in the intercontinental airfreight market in general. Accordingly, it is unable to predict with certainty whether the announced restructuring will reverse the existing trend of increasing international losses. However, the company said it expected the announced measures to remove a substantial degree of risk from its European operations, enhance flexibility by replacing fixed with variable expense, and improve the performance of its international business in the long-term. The company also said it expected the restructuring to substantially improve international operating results in fiscal 1993 over levels it anticipated absent the restructuring.
 Commenting on the third quarter, Chief Executive Officer Frederick W. Smith said, "Our U.S. domestic business maintained its strength while persistent weaknesses in airfreight markets caused a significant increase in the international operating loss. Our domestic businesses in Europe have simply not provided the necessary synergies with our international business. The operations needed to support our intra- European service have been extremely costly, and we have not generated adequate revenues to cover our costs. In addition, the market in Europe had not developed express traffic as quickly as we had expected it to. As result of these factors, effective May 4, we will no longer offer domestic services in Europe or intra-European services and will concentrate on our intercontinental express and business logistics services."
 FEDERAL EXPRESS CORPORATION
 FINANCIAL HIGHLIGHTS
 QUARTER 3, FY 1992
 (In thousands, except earnings per share and operating data)
 Three Months Ended Nine Months Ended
 FINANCIAL RESULTS 2/29/92 2/28/91 2/29/92 2/28/91
 Revenue before
 adjustments $1,904,861 $1,885,386 $5,674,052 $5,794,995
 Revenue adjustment
 due to:
 Accounting change (15,325) -- (15,235) --
 Noise-kit reversal -- (20,900) -- (20,900)
 Revenue 1,889,536 1,864,486 5,658,727 5,774,095
 Operating expense
 before unusual items 1,886,165 1,843,572 5,476,128 5,498,189
 Restructuring charge 254,000 121,000 254,000 121,000
 Noise-kit reversal -- (10,600) -- (10,600)
 Operating expense 2,140,165 1,953,972 5,730,128 5,608,589
 Operating inc. (loss) (250,629) (89,486) (71,401) 165,506
 Other income (expense):
 Interest, net (39,357) (46,209) (123,903) (131,948)
 Other (8,004) (1,020) (18,537) (11,115)
 Payroll tax loss
 contingency -- (32,000) -- (32,000)
 Loss before income
 taxes (297,990) (168,715) (213,841) (9,557)
 Tax provision
 (benefit) (104,633) (63,074) (64,241) 15,550
 Net loss $(193,357) $(105,641) $(149,600) $(25,107)
 Loss per share $(3.58) $(1.98) $(2.78) $(0.47)
 Common and common
 equivalent shares 53,942 53,315 53,814 53,237
 OPERATING DATA
 Total volume (000) 95,758 83,338 271,498 250,102
 Average revenue per
 package $15.85 $16.83 $16.39 $17.26
 Average revenue per
 pound $ 2.94 $ 3.01 $ 2.98 $ 3.09
 Average pounds per
 package 5.4 5.6 5.5 5.6
 Operating weekdays 63 62 190 190
 AIR FREIGHT
 Total volume (million
 pounds) 160.1 158.5 508.9 590.0
 Average revenue per
 pound $1.13 $1.20 $1.18 $1.15
 -0- 3/16/92
 /CONTACT: Dan Copp, 901-395-3490, or Armand Schneider, 901-395-3464, both of Federal Express/
 (FDX) CO: Federal Express Corporation ST: Tennessee IN: SU: ERN


PS -- NY090 -- 8563 03/16/92 20:39 EST
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