On Dec. 20, worldwide shipper and Motley Fool Stock Advisor recommendation FedEx (NYSE:FDX) released second-quarter earnings for the period ended Sept. 30.

  • Revenues jumped 10% thanks to increased total combined average daily package volume at FedEx Express and FedEx Ground, which grew by 7%.
  • Operating margin was under pressure as a result of costs associated with the new pilot labor contract.
  • The company recently acquired ANC Holdings, a U.K. domestic express transportation company, and entered into an agreement to acquire Prakash Air Freight, its Indian express service provider.
  • Due to higher fuel costs, management is tightening its annual earnings guidance range to $6.35 to $6.65 per share, and third-quarter earnings are expected to be in the range of $1.20 to $1.35.
  • Rich Smith gives his take on the company's quarter, and its future, in "FedEx Is Just Fine."
  • The stock rates a solid four (out of five) stars in Motley Fool CAPS.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$8,926.0

$8,090.0

10.3%

Net Profit

$511.0

$471.0

8.5%

EPS

$1.64

$1.53

7.2%

Diluted Shares

311.0

308.0

1%



Get back to basics with a look at the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Operating Margin

9.4%

9.8%

(0.4)

Net Margin

5.7%

5.8%

(0.1)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$1,855

$786

136%



Liabilities

Q2 2007

Q2 2006

Change

Long-Term Debt

$2,047

$2,203

(7.1%)



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2007

YTD 2006

Change

Cash From Ops.

$1,348

$1,135

18.8%

Capital Expenditures

$1,459

$1,326

10%

Free Cash Flow

($111)

($191)

N/A



Find out why Fools always follow the money.

Related Companies:

  • United Parcel Service (NYSE:UPS)
  • Expeditors International of Washington (NASDAQ:EXPD)
  • CH Robinson Worldwide (NASDAQ:CHRW)

Related Foolishness:

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UPS is an Income Investor pick.