- The Washington Times - Thursday, March 19, 2009

NEW YORK (AP) - FedEx said Thursday its fiscal third-quarter profit tumbled 75 percent as severe weakness in the global economy offset the benefit of lower fuel prices. The company said it will eliminate more jobs and make other cutbacks to deal with the ongoing economic slowdown.

The Memphis, Tenn.-based company, often seen as a bellwether for the U.S. economy, said it earned $97 million, or 31 cents per share, compared with $393 million, or $1.26 a year earlier.

Revenue fell 14 percent to $8.14 billion, from $9.44 billion.

Analysts polled by Thomson Reuters expected profit of 46 cents per share on revenue of $8.65 billion.

“Our financial performance was sharply lower during the quarter due to the global recession,” Chairman, President and Chief Executive Frederick W. Smith said in a statement. “While we are gaining market share in all of our transportation segments, the downturn in our industry and the severity and expected duration of the recession require that we take additional actions.”

To further reduce costs, FedEx plans to cut more jobs, although it didn’t say how many. It also plans to scale back some workers’ hours and wages and trim air and truck capacity. The company said it will take a charge of about $100 million in its fiscal fourth-quarter for the changes, excluding any writedowns on the value of assets. FedEx expects the cutbacks to save about $1 billion in the next fiscal year.

The company expects fourth-quarter earnings of 25 to 50 cents per share, compared with a loss of 78 cents per share a year ago.

FedEx shares fell $2.55, or 5.3 percent, to $40.75 in premarket trading.

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