FedEx Q4 net profit rises 19% to $280 million; revenue up 8%

Our Corporate Bureau
25 June 2003

FedEx reported the following consolidated results for the fourth quarter:

• Revenue of $5.83 billion, up 8 per cent from $5.42 billion the previous year.
• Operating income of $492 million, up 18 per cent from $416 million a year ago.
• Net income of $280 million, up 19 per cent from last year''s $236 million.

The total average daily package volume at FedEx Express and FedEx Ground grew a combined 5 per cent year over year for the quarter, due to continued strong growth at Ground and in international express shipments.

For the full fiscal year, FedEx reported earnings of $2.74 per diluted share. Last year''s reported earnings were $2.34 per diluted share including a non-cash charge from an accounting change of $0.05. Additional consolidated results for the fiscal year were:

• Revenue of $22.5 billion, up 9 per cent from $20.6 billion the previous year.
• Operating income of $1.47 billion, up 11 per cent from $1.32 billion a year ago.
• Net income of $830 million, up 17 per cent from last year''s $710 million.

"FedEx achieved record earnings during the year, as the company advanced its strategy of being a full service transportation company with the broadest choices in the industry," says Frederick W Smith, chairman, president and chief executive officer. "Our strategy execution enabled the company to improve its revenue, earnings and returns during the year, posting a strong performance despite challenging economic conditions."

"FedEx''s return on invested capital improved in fiscal 2003, as earnings continued to increase and the company''s capital intensity declined," says Alan B Graf Jr, executive vice-president and chief financial officer. "We believe that our efforts, combined with an improving economy, will provide FedEx improved profitability and cash flow."

Capital spending in fiscal 2003 was $1.5 billion, marking the fifth consecutive year of reduced capital expenditures. The company generated solid positive cash flow during the year despite over $1 billion in pension contributions. The company also repurchased 3.275 million shares of FedEx stock at a cost of $186 million, disbursed $60 million in cash dividends, and increased its cash level by $207 million during 2003. A total of 3.375 million shares remain under the existing share repurchase authorisation.