Shares for FedEx (FDX) were up 0.86% on Wednesday after the company released its first fiscal 2017 earnings report. The acquisition of TNT Express has proved to be beneficial for the company, who had another strong quarter. Here are three things to know about their earnings report:
1. Adjusted EPS Was Up 20% Year-Over-Year
Adjusted earnings per share for the first quarter of fiscal 2017 was up 20% year over year, reaching $2.90.
EPS was $2.65 when including the negative impact of restructuring, integration and amortization costs associated with the TNT Express acquisition.
2. Revenue Was Up 19.4%
FedEx reported that revenue was up 19.4% year-over-year, reaching $14.7 billion.
That majority of the revenue increase came from TNT Express, which generated $1.8 billion in revenue on its own.
Without TNT, revenue for FedEx was up 4.7%.
Adjusted operating margin was virtually flat year over year at 9.3%. With TNT Express barely profitable at the moment, FedEx’s adjusted operating margin was hurt.
3. Ground and Express Business Strengthened
FedEx’s ground business once again saw double-digit growth, with revenue up 12% year over year, reaching $4.3 billion.
While that growth rate isn’t as high as what investors have come to expect, this quarter included an accounting change and expenses related to the TNT Express acquisition.
Last quarter, revenue grew by 12%, and that was purely organic growth.
The FedEx Express arm also saw margin improvements, although growth was slightly disappointing. Revenue for the sector was up 1% year over year. Adjusted segment operating income rose to $646 million, up from $545 million the previous year.
FedEx posted margin growth for the first time in over a year. Segment operating margin was up 0.2% to 14.2%.
The company’s freight business only saw a 3.6% increase in revenue year over year. Operating margin was down from 8.2% to 8.1%.
