FedEx revenue up by 14% to $23.5 billion in second quarter
The growth was primarily fueled by higher yields in U.S. domestic and international priority shipping, alongside increased domestic package volumes.
FedEx announced financial performance for its fiscal second quarter ending November 30, reporting consolidated net revenue of $23.5 billion. This represents a 14% increase over the $22.0 billion recorded during the same period last year.
The company saw its operating income nearly double, climbing to $1.38 billion from $0.74 billion in the previous year. According to the company, the growth was primarily fueled by higher yields in U.S. domestic and international priority shipping, alongside increased domestic package volumes.
The bottom line also benefited from aggressive cost-saving measures through ongoing transformation initiatives and a reduction in business optimisation expenses.
“I am extremely proud of our team members worldwide for their commitment to make every FedEx experience outstanding this Peak season,” said Raj Subramaniam, FedEx President and CEO,
However, the quarter was not without its challenges. The gains were partially offset by the financial fallout from shifting global trade policies, rising wage rates, and increased variable incentive compensation. FedEx also navigated higher purchased transportation costs and the operational impact of grounding its MD-11 aircraft fleet.
The performance across business segments was mixed. The Federal Express division saw improved operating results, benefiting from the same yield and volume trends driving the consolidated growth. Conversely, the FedEx Freight segment experienced a decline in results.
This dip was attributed to lower shipment volumes and increased expenses related to the hiring of dedicated sales professionals as the company prepares to spin off the unit. Notably, FedEx Freight incurred $152 million in one-time costs during the quarter specifically related to this spin-off.
