FedEx Corp lowers earnings outlook for FY09

US transportation major FedEx Corp has slashed its earnings guidance and capital spending for fiscal 2009, with its business suffering the impact of the slump in the global economy.     

FedEx expects to earn $3.50 to $4.75 per share for the fiscal 2009, down from the previous guidance of $4.75 to $5.25 per share, it stated.     

"We are adjusting our expense plans to more closely align with the weaker business conditions, and are now targeting capital spending of $2.5 bn for fiscal 2009, down from $3 bn at the start of the year," FedEx Executive Vice President and Chief Financial Officer Alan B Graf said.     

Reducing the earnings forecast, the Memphis-based company stated that the significantly weaker economic condition have offset the benefits from lower fuel prices and the expected rise in the business volume by the departure of DHL from the US domestic package market.     

However, FedEx expected a better earning of $1.58 per share for the second quarter ended November 30, 2008. Earlier, the guidance for the quarter was $1.40 to $1.60 per share, the statement said.     

The company stated that its 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," Graf said.      FedEx would come out with the second quarter results and the cost reduction measures on December 18.