FedEx sees 75% drop in 3rd quarter profit

FedEx sees 75% drop in 3rd quarter profit FedEx Corp. reported Thursday profit of $97 million for its third quarter ending Feb. 28, down 75 percent from the same period last year.
   Revenue for the period was $8.14 billion, down 14 percent from $9.44 billion the previous year.
   'Our financial performance was sharply lower during the quarter due to the global recession,' said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. '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.'
   The company said the global recession led to lower shipment volumes at FedEx Express and FedEx Freight and a more competitive pricing environment. It said revenue was also negatively impacted by reduced fuel surcharges and lower shipment weights. It also incurred costs related to personnel and facility reductions.
   Those declines were partially offset by cost control efforts and market share gains, including volumes gained from DHL exiting the U.S. domestic package market, FedEx said.
   The company said it would cut costs even further by reducing network capacity at FedEx Express and FedEx Freight, cutting personnel and work hours and expanding previously announced pay actions to include non-U.S. employees, where permitted.
   The company said the cost-reduction actions are expected to result in fourth quarter charges of about $100 million, excluding any potential asset impairment charges. For fiscal 2010, those actions are targeted to reduce expenses by about $1 billion.
   FedEx said it expected earnings to be between 45 cents and 70 cents per diluted share in the fourth quarter compared to $1.45 in the same 2008 period, excluding a charge that it took to minimize the use of the Kinko trade name last year.