FedEx (FDX) Lowers FY09 EPS Guidance

December 8, 2008 4:32 PM EST

FedEx Corporation (NYSE: FDX) announced that it expects to report earnings of $1.58 per diluted share for the second quarter ended November 30. Previous earnings guidance for the quarter was $1.40 to $1.60 per diluted share.

For fiscal 2009, the company has reduced its earnings guidance to $3.50 to $4.75 per diluted share from the previous guidance of $4.75 to $5.25, as significantly weaker macroeconomic conditions are expected to offset the benefits from lower fuel prices and the announced departure of DHL from the U.S. domestic package market. This outlook assumes stable fuel prices.

CFO Graf said, "Second quarter results benefited from rapidly declining fuel prices and continued cost management. However, demand for our services weakened sequentially throughout the quarter and global economic trends continue to worsen, substantially reducing our second half outlook. We are adjusting our expense plans to more closely align with the weaker business conditions, and are now targeting capital spending of $2.5 billion for fiscal 2009, down from $3.0 billion at the start of the year."

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