If you want to be a long-term winner in the market, you have to know when to break the rules. For example, it's generally considered a good idea to avoid capital-intensive industries with below-average margins and large, entrenched competitors. Yet if you followed those general guidelines, you'd never have a chance at FedEx (NYSE:FDX) -- a Motley Fool Stock Advisor recommendation whose stock has been better than "all right" for the past one, five, 10, or 20 years.
With fiscal third-quarter results in the book, this global freight giant is still going strong. Revenue was up 9% for the period, and operating margin improvements of nearly 1.5 percentage points fueled operating income growth of 29% -- growth that ultimately became 35% at the net income level.
Most of FedEx's general operating metrics were also positive. Total average package volume was down 1%, but average volume in the ground and express businesses was up about 4%, and average freight pounds were up 5%. Package yields climbed 9%, and freight yields were up an even stronger 13%.
All three shipping businesses did well, with express and freight growing operating income by more than 30% each, and the ground business growing 26%. Express is still far and away the most important segment, though, and the company experienced both good volume and profitability.
The Kinko's business is still anemic -- revenue was flat and operating income was down more than one-third. While the company is investing in more technology here in the hopes of overcoming a tough pricing environment, investors probably need to accept it for what it is -- namely, a nationwide network of drop-off nodes for the package business. Now, if FedEx could just find some other company like Office Depot (NYSE:ODP) to come in and take over the copying business (but leave the package acceptance/shipment operations alone), that'd be even better, in this Fool's opinion.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
