FedEx Freight reported a lower profit but growing revenue in its first four months as an independent company.
The company reported a profit of $230 million, or $1.54 a share, in the four months ended Sept. 30. That compares with a profit of $404 million, or $2.70 a share, in the same period a year earlier, prior to the spinoff.
The results represent a one-time, four-month transition period as FedEx Freight moves to report its financial results on a calendar year cycle, the company said.
Stripping out certain one-time items, adjusted earnings were $2.15 a share for the four-month period, down 25% year-over-year.
Revenue rose 9.2% to $3.28 billion, a figure which includes $2.44 billion in revenue from the three months ended Sept. 30. Analysts polled by FactSet were expecting $2.38 billion in revenue for that period.
Average daily shipments were down 1.4% to around 88,900 during the transition period, while tonnage per day was flat at around 41,700 tons.
"While we are in the early stages of our journey as an independent company, we are encouraged by the momentum we are seeing across our operational, commercial, and technology initiatives," Chief Executive John Smith said.
FedEx Freight was officially spun off from FedEx in June, a move designed to sharpen the latter company's focus on its core business. FedEx on Wednesday lifted its guidance and reported 12% revenue growth in the third quarter.
FedEx Freight said Thursday that it now projects revenue for the seven-month period between June 1 and Dec. 31 in a range of $5.58 billion to $5.65 billion. The new forecast is above its original guidance for 4% to 6% growth, the company said.
That projection includes between $2.3 billion and $2.37 billion for the final three months of the year. Analysts currently expect $2.23 billion for that period.
The company also forecasted earnings per share before mark-to-market retirement plan accounting adjustments of between $1.69 and $1.79 for the seventh-month period, down from its original guidance of between $1.75 and $1.95 a share.
After excluding costs related to the spinoff, FedEx Freight guided for earnings per share between $2.80 and $2.90, up from its original guidance of $2.40 to $2.60. That projection includes between 65 cents and 75 cents a share for the last three months of the year.
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