FedEx Cuts 2009 Earnings Outlook

December 8, 2008 9:13 p.m. EST

Memphis, TN (AHN) - FedEx Corp. reduced its fiscal 2009 earnings guidance on Monday due to the slowing number of package deliveries during the economic downturn.

The package delivery company now expects fiscal 2009 earnings to fall between $3.50 and $4.75 a share. Earlier guidance called for $4.75 to $5.25 a share. The revised guidance assumes stable fuel price going forward.

FedEx said the weaker macroeconomic environment will likely offset benefits from lower fuel prices going forward.

The company also said it plans to lower capital expenditures for fiscal 2009 to $2.5 billion from the original target of $3 billion.

FedEx did give a preview of second quarter earnings, expecting to report $1.58 a share. The result would top analyst estimates for $1.51, according to Thomson Reuters, and be near the top of their forecasted range for $1.40 to $1.60 a share.

"Second quarter results benefited from rapidly declining fuel prices and continued cost management," said Alan B. Graf, Jr., executive vice president and CFO in a company statement.

"However, demand for our services weakened sequentially throughout the quarter and global economic trends continue to worsen, substantially reducing our second half outlook," he added.

FedEx is scheduled to report second quarter earnings on Dec. 18, 2008 at 7 a.m. CST.