FedEx Corp. (FDX) has reported a 10.85 percent rise in profit for the quarter ended Feb. 28, 2017. The company has earned $562 million, or $2.07 a share in the quarter, compared with $507 million, or $1.84 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $638 million, or $2.35 a share compared with $692 million or $2.51 a share, a year ago.

Revenue during the quarter grew 18.52 percent to $14,997 million from $12,654 million in the previous year period. Gross margin for the quarter contracted 260 basis points over the previous year period to 76.68 percent. Total expenses were 93.17 percent of quarterly revenues, down from 93.17 percent for the same period last year. This has led to an improvement of 1 basis points in operating margin to 6.83 percent.

Operating income for the quarter was $1,025 million, compared with $864 million in the previous year period.

However, the adjusted operating income for the quarter stood at $1,120 million compared to $1,160 million in the prior year period. At the same time, adjusted operating margin contracted 170 basis points in the quarter to 7.47 percent from 9.17 percent in the last year period.

"Our worldwide FedEx team delivered an outstanding peak season. Even with our highest volumes ever, we achieved record service levels," said Frederick W. Smith, FedEx Corp. chairman and chief executive officer. "We are confident our strategic investments to expand our global scope and portfolio of solutions position FedEx for greater long-term profitable growth as we adapt to meet the evolving needs of our customers."

For financial year 2017, FedEx Corp. forecasts diluted earnings per share to be in the range of $10.80 to $11.30. The company forecasts diluted earnings per share to be in the range of $11.85 to $12.35 on adjusted basis.

The company has spent $3,667 million cash to meet investing activities during the nine month period as against cash outgo of $3,579 million in the last year period. It has incurred net capital expenditure of $3,667 million on net basis during the nine month period, up 3.44 percent or $122 million from year ago period.

Cash flow from financing activities was $731 million for the nine month period as against cash outgo of $1,061 million in the last year period.

Cash and cash equivalents stood at $3,173 million as on Feb. 28, 2017, up 11.69 percent or $332 million from $2,841 million on Feb. 29, 2016.

Working capital increases marginally

FedEx Corp. has recorded an increase in the working capital over the last year. It stood at $4,488 million as at Feb. 28, 2017, up 4.42 percent or $190 million from $4,298 million on Feb. 29, 2016. Current ratio was at 1.60 as on Feb. 28, 2017, down from 1.72 on Feb. 29, 2016.

Cash conversion cycle (CCC) was almost stable at 6 days for the quarter, when compared with the last year period. Days sales outstanding went up to 22 days for the quarter compared with 20 days for the same period last year.

Days inventory outstanding has decreased to 7 days for the quarter compared with 8 days for the previous year period. At the same time, days payable outstanding was almost stable at 35 days for the quarter, when compared with the previous year period.