FedEx Corp. (FDX) has reported an 1.30 percent rise in profit for the quarter ended Nov. 30, 2016. The company has earned $700 million, or $2.59 a share in the quarter, compared with $691 million, or $2.44 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $757 million, or $2.80 a share compared with $729 million or $2.58 a share, a year ago.
Revenue during the quarter grew 19.90 percent to $14,931 million from $12,453 million in the previous year period. Gross margin for the quarter contracted 260 basis points over the previous year period to 77.02 percent. Total expenses were 92.18 percent of quarterly revenues, up from 90.87 percent for the same period last year. That has resulted in a contraction of 131 basis points in operating margin to 7.82 percent.
Operating income for the quarter was $1,167 million, compared with $1,137 million in the previous year period.
However, the adjusted operating income for the quarter stood at $1,230 million compared to $1,200 million in the prior year period. At the same time, adjusted operating margin contracted 140 basis points in the quarter to 8.24 percent from 9.64 percent in the last year period.
"FedEx increased revenues and operating income despite continued low growth rates in the global economy. We are in the home stretch of our peak shipping season, and our service levels are high, thanks to the outstanding efforts of our hundreds of thousands of team members around the world," said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. "The integration of TNT Express into our broad portfolio of global business solutions is proceeding smoothly and according to plan."
For financial year 2017, FedEx Corp. projects diluted earnings per share to be in the range of $10.95 to $11.45 on adjusted basis.
Operating cash flow improves
FedEx Corp. has generated cash of $2,635 million from operating activities during the first half, up 7.38 percent or $181 million, when compared with the last year period.
The company has spent $2,581 million cash to meet investing activities during the first six months as against cash outgo of $2,550 million in the last year period. It has incurred net capital expenditure of $2,581 million on net basis during the first six months, up 1.22 percent or $31 million from year ago period.
The company has spent $431 million cash to carry out financing activities during the first six months as against cash inflow of $33 million in the last year period.
Cash and cash equivalents stood at stood at $3,059 million as at Nov. 30, 2016.
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