FedEx Corp. (NYSE: FDX) reported the following consolidated results for the fourth quarter ended May 31. The Company reported revenue of $17.4 billion, and net (loss) income of ($334 million).
Net income includes a tax benefit of $71 million related to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provision which allows tax losses to be offset against income from prior years that was taxed at higher rates. This benefit was mostly offset by a non-cash tax expense of $51 million due to a change in deferred tax balances related to foreign operations.
“Though our fiscal fourth quarter performance was severely affected by the COVID-19 pandemic, I am extremely proud of the herculean efforts of our team members,” said Frederick W. Smith, FedEx Corp. chairman and CEO. “With safety as the first priority, these men and women provided essential transportation of critical supplies across the globe and delivered peak-level e-commerce volumes in the United States. As a result of the strategic investments we have made to enhance our capabilities and efficiencies, FedEx is well positioned to support and benefit from the reopening of the global economy.”
Additionally, operating results were negatively affected by one fewer operating weekday, increased costs to expand services, higher bad debt expense, increased self-insurance accruals and the loss of business from a large customer. These factors were partially offset by the strong residential delivery volume growth at FedEx Ground, increased revenue per shipment at FedEx Freight, a favorable net impact of fuel and lower variable incentive compensation expenses.
In addition, FedEx announced that it recognizes the entry into force of the U.S.-Mexico-Canada Agreement (USMCA/T-MEC/CUSMA). This agreement will benefit all three economies and make them more competitive around the world.
At FedEx, trade is our business, and expanding global trade is essential to our customers, our workers and our company. USMCA replaces the twenty-six-year-old North American Free Trade Agreement (NAFTA), helping to streamline trade across the North American market, which is of critical importance to FedEx and our customers.
“We applaud the governments of the United States, Mexico and Canada for working together to approve and implement an agreement that simplifies trade for the highly integrated North American supply chains,” said FedEx COO Raj Subramaniam. “Modernizing and expanding global trade through free trade agreements like USMCA breaks down trade barriers, creates new job opportunities and helps our customers reach new markets.”