FedEx profit slides 53 per cent

But Memphis-based company meets analyst expectations and maintains its second-quarter outlook of 65 to 90 cents per share

Samantha Bomkamp



New York — The Associated Press Last updated on Thursday, Sep. 17, 2009 08:27AM EDT



FedEx (FDX-N78.20----%) said Thursday its first-quarter earnings fell 53 per cent – matching its prediction released last week – and warned its profit will remain weak through at least the end of the year.



But the world's second largest package delivery company, considered a bellwether of economic health, said it does see signs of improvement in the economy.



The Memphis, Tenn.-based company reported earnings of $181-million (U.S.), or 58 cents per share, compared with $384-million, or $1.23 per share, a year ago.



Revenue fell 20 per cent to about $8-billion.



Analysts predicted profit of 58 cents per share on revenue of $8.24-billion.



The company said its sales are continuing to be hurt by the slow economy, as people ship slower and less often. The quarter was also hurt by lower fuel surcharges – the fees it passes on to customers based on the price of fuel.



But FedEx said it was able to offset some of the shortfall by “vigilantly” cutting costs. Volume in International Priority – its most lucrative segment – was also better than expected.



FedEx Corp. reiterated its profit prediction of 65 to 90 cents per share for the second quarter ending in November. That's down from $1.23 a year ago.

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