Start a conversation

FedEx reports very solid fiscal first quarter earnings numbers

By Jeff Berman / / September 16th, 2020

Memphis-based global freight transportation and logistics services provider FedEx posted solid fiscal first quarter earnings results late yesterday.

Revenue—at $19.3 billion—was up 13% annually, and operating income—at $1.59 billion—headed up 63%. The company’s quarterly net income on an adjusted basis—at $1.25 billion—outpaced the $745 million recorded for the same quarter last year. Adjusted earnings per share—at $4.87—outpaced the $3.05 per share, from a year ago, and topped Wall Street expectations, of $2.54 per share. 

FedEx attributed the quarterly operating results gains to volume growth in FedEx International Priority and U.S. domestic residential services, as well as yield improvement at FedEx Ground and FedEx Freight and also one additional operating weekday. But those gains came with a caveat, the company said, in that they were offset by costs to support strong demand levels and also to expand services, variable compensation expenses, and costs related to COVID-19.

“At FedEx, keeping the world connected in good times and during periods of great need is who we are and what we do every day,” said FedEx Chairman and CEO Fred Smith in a statement. “With safety as our first priority, we have worked tirelessly to keep the world's industrial, healthcare and at-home supply chains flowing during the pandemic. Detailed planning is under way at FedEx to distribute vaccines at scale worldwide once approved. Our earnings growth underscores the importance of our business initiatives and investments over the last several years. In many ways, the world has accelerated to meet our strategies and we remain very confident in the future of FedEx.”

FedEx Express revenue rose 8% annually, to $9.647 billion, with operating income, at $710 billion, climbing 149% annually. FedEx Ground revenue, at $7.040 billion, saw a 36% annual increase, with the segment’s operating income up 30%, to $834 million. Revenue for FedEx Freight, its less-than-truckload segment, rose 4%, to $1.826 billion, and operating income increased 41%, to $274 million.

Total quarterly package revenue, at $7.404 billion, was up 5% annually. And total U.S. package revenue, at $3.383 billion, saw a 2% annual gain, with total international export package revenue up 10$, to $2.933 billion, and International Domestic up 1%, to $1.088 billion.

Total daily U.S. domestic package volume increased 8%, to 2.977 million and U.S. revenue per package, at $17.48, was off 7%. Total daily international export packages at 956,000 was up 16% with average revenue per package down 7% to $47.18.

Average weight per shipment, for FedEx Freight, at 1,067 pounds, slipped 3%, with average revenue per shipment, at $272.62, up 2%.

Assessing the state of the economy, Brie Carere, FedEx Executive Vice President, Chief Marketing and Communications Officer, said on the earnings call that the economic outlook remains uncertain due to the continued impact of COVID-19 around the world.

“Until the vaccine is available globally and the virus is contained, forecasting the economic recovery remains challenging,” she explained. “In the U.S., spending that would normally have gone into services has shifted toward goods with goods spending boosted further by pent-up demand. Retail sales are growing again year-over-year and e-commerce is booming at holiday levels and, of course, more to come on that in a moment. The service sector severely impacted by the pandemic and high unemployment rates continues to weigh on growth.

As for the impact of e-commerce over the course of the ongoing COVID-19 pandemic, Carere said that prior to the pandemic, FedEx projected that the U.S. domestic market would hit 100 million packages per day by calendar year 2026, but FedEx now projects that the U.S. domestic parcel market will hit this mark by calendar year 2023, pulling volume projections forward by three years from the previous expectations.

“E-commerce fueled substantially by this pandemic is driving the extraordinary growth,” she said. “In fact, 96% of the US growth is expected to come from e-commerce. While e-commerce as a percentage of total retail has declined from its apex in April, it remains elevated. E-commerce as a percentage of total retail for Q2 calendar year 2020 is estimated at 21% compared to 15% in Q2 calendar year 2019.”

FedEx President and Chief Operating Officer Rajesh Subramaniam addressed Peak Season on the call said that as the company enters what it expects to be a peak holiday shipping season unlike any other in the company’s history, FedEx is working closely with our customers and building solutions to enable them to succeed.

“We're also adding more than 70,000 positions in key markets across the United States,” he said. “New and expanded ground facilities planned prior to peak will provide additional strategic capacity, including six regional sortation facilities each strategically located to provide short-haul solutions for large retailers, four new automated stations, eight new or expanded large package facilities and 50 existing facilities are being expanded with additional material handling equipment and automation.”

Ship Watchers is a logistics auditing company that keeps carriers compliant on rates, surcharges, incentives, and incorrect charges found within carrier invoices.  

Want to stay on top of carrier increases, rate changes, and benchmark studies while insuring that your invoices are free from errors and incorrect charges?  Give us a shout to learn more at or by calling us at 800.550.7217 ext 874.

No term agreements, no additional effort, and no additional fees...  Just a small percentage of the savings we bring to your carrier accounts directly through our auditing process.

Learn More Today... - 24/7 Support including Chat

Small Parcel Negotiation and Audit Consultants

Choose files or drag and drop files
Was this article helpful?
  1. Rick R.

  2. Posted