FedEx Beats Estimates, Cites Strong International Revenues
By Matt Paolucci

Memphis, Tenn.-based FedEx Corp. (FDX) reported today that its fiscal fourth-quarter net income was 11 percent higher than year-ago levels, fueled by strong growth in international service.

The transportation giant turned in net income of $245 million, or 85 cents a diluted share, up from $221 million, or 73 cents a share, in the fourth quarter of last year.

Analysts polled by First Call/Thomson Financial were expecting earnings per share of 81 cents.

Fuel costs surged $84 million in the fourth quarter, but were offset by a surcharge, which was increased 33 percent to 4 percent from 3 percent in April.

At the company's FedEx Express unit, revenue rose 9 percent to $4 billion in the fourth quarter.

FedEx Ground revenue rose 10 percent to $549 million in the quarter. Average daily volume grew 3 percent.

Total revenue for the period rose 11 percent to $4.85 billion.

For the full fiscal year 2000, the company posted net income of $688 million, or $2.36 a share, up from $631 million, or $2.13 a share, an increase of 10.8 percent over the prior year period.

"Our unparalleled global express network is delivering very strong growth, particularly in Asian and European markets," Frederick W. Smith, FedEx's chairman, CEO and president, said in a statement. "Revenue from our premium FedEx International Priority service grew 21 percent in the fourth quarter."

Chief financial Officer Alan Graf Jr. added, "In fiscal 2001 we expect to improve growth and profitability largely through new initiatives that are allowing us to offer the entire spectrum of FedEx services through a single point of access."

Separately, FedEx said capital expenditures would be about $2.25 billion in fiscal 2001, which begins June 1.

Capital spending fell to less than $2 billion in the previous fiscal year, according to Graf. The company had pared down spending as fuel costs surged and hurt earnings.

Graf also said the company has "lost a little" market share, but added "we clearly remain the global express leader by a wide margin."

The company said U.S. domestic express traffic growth, which has been sluggish in recent quarters, reached its highest level in more than a year.

Regarding the Company's 10-15 percent estimated growth rate for next year, Smith stated in an interview with CNBC, "We think we'll be at the upper end of those earnings improvement estimates."

Shares of FedEx were up $1.56 at 38.56 in late afternoon trading. The 52-week high on FDX is $57.50, the low is $30.56.