The last first quarter?

TNT Express today reported its financial and operating results for the first quarter of 2015. Given that FedEx’s acquisition of TNT will likely close “in the first half of 2016,” it is possible that this will be TNT’s last first quarter.

Of course, we said much the same thing several years ago when UPS appeared to be on the verge of acquiring TNT Express, but it seems unlikely that the EU’s competition authority will block the deal this time, and that TNT has likely started its last year as an independent company. Which, given the first-quarter results, is probably a good thing.

This is not to say that TNT is bleeding money horribly and on the verge of going out of business. It is not. Rather, it is more that several years of effort to return the company to growth and prosperity seem to have had little effect. Revenue is almost static, operating income (whether reported or adjusted) is falling, and TNT continues to report losses. Not huge losses – €19 million in the first quarter – but not the kind of profit that will keep shareholders happy and allow the company to make the investments it needs for the future. (The figures in the chart at right are TNT’s adjusted data, taking into account foreign exchange effects, and the impact of one less trading day in 1Q15. On an as reported basis, things were slightly less rosy, though not by much.)

Discussing the results, CEO Tex Gunning said: “Good progress is being made with the execution of the Outlook strategy,” but added that “first quarter results were impacted by transition costs associated with the Outlook strategy.” Looking ahead, he said: “Our guidance is unchanged: we expect 2015 to be a challenging year of transition, followed by year-on-year improvements from 2016 onwards.”

To which we would add that, absent a surprise from the competition authority, from 2016 onwards, things will be different indeed.