Poor earnings may stoke TNT Express acquisition

TNT, the Dutch mail and express company, said it will proceed with plans to spin off its express division in May even as the unit’s earnings declined by nearly 10 per cent due to political unrest and natural disasters. Operating income at the express unit fell by about US$36 million in the first 12 weeks […]


FedEx TNT Express UPS


TNT, the Dutch mail and express company, said it will proceed with plans to spin off its express division in May even as the unit’s earnings declined by nearly 10 per cent due to political unrest and natural disasters. Operating income at the express unit fell by about US$36 million in the first 12 weeks of 2011, TNT said. Spikes in the price of oil, political unrest in the Middle East and floods and strikes earlier in the year in Australia have reduced express volumes which were worsened by a decline in volume at Brazilian units acquired in 2007 and 2009 that are still being integrated into TNT’s global network. Express revenue in Europe, the Middle East and Africa will rise “modestly” in 2011, and the operating margin will match the 9 per cent achieved in 2010. The bright spot are sales in the Americas and Asia-Pacific regions, which are both expected to grow at a double digit rates in 2011. The slump will likely revive speculation that one of its American rivals – UPS or FedEx �C will ultimately mount a take-over bid.