FedEx quarterly profit off 1.4pc, revenue up 2.6pc to US$6.8 billion

AMERICAN express delivery giant FedEx posted a 1.4 per cent year-on-year fourth quarter profit decline to US$550 million while revenues increased 2.6 per cent to $6.8 billion.

Performing best were FedEx Ground with revenues up nine per cent to $2.48 billion while FedEx Freight increased sales seven per cent, enjoying a near doubling of operating profit due to higher yield, volume growth and new efficiencies.

Despite the overall corporate profit decline, FedEx expects to grow its express business overseas, particularly in Europe. In April, FedEx agreed to purchase Polish courier Opek, and has announced plans buy French B2B express delivery specialist firm Tatex.

The Tatex buyout is expected to give FedEx Express access to a domestic ground network that generates EUR150 million (US$188.6 million) in annual revenue.

FedEx president Frederick Smith said the improved performances of FedEx Ground and FedEx Freight throughout the entire financial year, as well as better yields across all business segments, led to "strong earning results for fiscal 2012."

Said FedEx chief financial officer Alan Graf: "We expect to mitigate [the challenges ahead] by reducing costs and improving efficiencies, and we are continuing to evaluate additional actions to substantially improve FedEx Express margins."