FedEx Earnings Call Nuggets: Global Capacity and Trade Network
FedEx Corporation (NYSE:FDX) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Justin Yagerman – Deutsche Bank: I wanted to ask you about the capacity side in the international Express business. Obviously, margins a lot better than expected on the Express side this quarter, and I know that due to a lot of what you’ve got going on in the domestic side as well, but wanted to dig in and see how the progress has going in terms of the third-party linehaul initiative and where you guys are at in terms of frequencies on export flights out of Asia.
David J. Bronczek – President and CEO, FedEx Express: Thanks Justin. This is Dave Bronczek. You’re right. We adjusted for the second quarter in a row now last quarter in April and this quarter in July. We reduced some of our global capacity coming out of Asia which you saw in some of our numbers in terms of fuel usage and fuel in general. That being said, our international economy volume continues to grow at a rapid rate. It was up 15%. I think it’s been in the teens now for several quarters in a row. So, we’re actually putting those packages and that network into the right system form now that is actually benefiting us across the world. Thank you for the question.
J. Bruce Chan – Stifel Investments: It’s actually Bruce Chen on for David Ross. I’m just curious on the trade network side. We’ve heard from some of the other forwarders out there that (TransPac) volumes have been kind of (indiscernible) with soft summer volumes and limited optimism for 2014. I’m wondering if your outlook is the same or if you’re expecting something a little bit rosier? And if rosier, is that because you’re taking share whether price-related or product offering related?
David J. Bronczek – President and CEO, FedEx Express: Thank you very much. This is Dave again. We are toggling our traffic back and forth between Express and FTN. So FTN is performing very well. I think the volumes are slightly higher. The yields are a little bit weaker. I think that’s the case across the world, but it’s performing exactly like we had planned it to. So, our FTN organization is doing a terrific job, a great service and moving the lower yielding international economy into their networks.