Operating Income of $1.6 Billion, Up 9% Year Over Year; Up 11% on an Adjusted Basis
New $5 Billion Share Repurchase Program Authorized, Including $1.5 Billion Accelerated Share Repurchase Program
MEMPHIS, Tenn., December 16, 2021–(BUSINESS WIRE)–FedEx Corp. (NYSE: FDX) today reported financial results for the quarter ended November 30.
“Our operating income increased during the quarter, thanks to the enormous efforts of our team members. We are nearing the finish line of another robust peak shipping season, and we salute our more than 600,000 team members worldwide for their dedication in delivering the holidays to our customers,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer.
FedEx reported (adjusted measures exclude the items listed below for the applicable fiscal year):
Fiscal 2022 | Fiscal 2021 | |||||||
As Reported | Adjusted | As Reported | Adjusted | |||||
Revenue | $23.5 billion | $23.5 billion | $20.6 billion | $20.6 billion | ||||
Operating income | $1.60 billion | $1.68 billion | $1.47 billion | $1.51 billion | ||||
Operating margin | 6.8% | 7.1% | 7.1% | 7.4% | ||||
Net income | $1.04 billion | $1.30 billion | $1.23 billion | $1.30 billion | ||||
Diluted EPS | $3.88 | $4.83 | $4.55 | $4.83 |
This year’s and last year’s quarterly consolidated results have been adjusted for:
Impact per diluted share | Fiscal 2022 | Fiscal 2021 | ||||
Mark-to-market (MTM) retirement plans accounting adjustments | $ | 0.73 | $ | 0.15 | ||
Business realignment costs | 0.13 | — | ||||
TNT Express integration expenses | 0.10 | 0.13 |
“FedEx operating income grew in our second quarter, driven by strong revenue growth and effective management of our cost and expected labor availability challenges,” said Michael C. Lenz, FedEx Corp. executive vice president and chief financial officer. “While adjusted earnings per share was unchanged year over year, this year’s effective tax rate was significantly higher, as last year’s earnings included a $0.71 per share tax benefit.”
Second quarter operating income improved due to higher revenue per shipment at all transportation segments, despite the negative effect of labor market challenges that have contributed to global supply chain disruptions. The challenging labor market affected the availability and cost of labor resulting in network inefficiencies, higher purchased transportation costs, and higher wage rates, which increased costs by an estimated $470 million year over year, primarily at FedEx Ground. The quarter’s results also benefited from continued strategic management actions to improve revenue quality and favorable net fuel.
Net income includes a pre-tax, noncash MTM net loss of $260 million ($195 million, net of tax, or $0.73 per diluted share) related to the termination of a TNT Express European pension plan and a curtailment charge related to the U.S. FedEx Freight pension plan.
Last year’s net income included a pre-tax, noncash loss of $52 million ($41 million, net of tax, or $0.15 per diluted share)…
Read More: FedEx Corp. Reports Higher Second Quarter Operating Income