An analysis of operating income by segment reveals much about the underlying earnings trends at the company and what to expect in the future.
How does FedEx Corporation make most of its money? That's a question worth investigating since the company's chief moneymaking segment has changed hands a few times in the past decade. Moreover, a fuller understanding of how the company operates will help investors appreciate what's happening with the investment propositions at FedEx and its main rival, United Parcel Service, Inc. Let's take a closer look.
Express just barely takes the title
A breakout of FedEx's segment operating income shows that, for the first time since 2010, the express segment was the most profitable in 2016. However, ground revenue and profit continue to rise in seemingly inexorable fashion since the last recession. In a sense, you can think of this chart in two periods -- pre- and post-recession: