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FedEx Cuts Forecasts

The freight giant says it has been hit by rising fuel costs.
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FedEx (FDX) - Get FedEx Corporation Report lowered its earnings projection for the current quarter and fiscal year, citing increased fuel costs and weak freight trends.

The parcel-shipping giant now sees earnings of $1.45 to $1.55 for the quarter ending Nov. 30, down from its previous forecast of $1.60 to $1.75. Analysts polled by Thomson Financial anticipated earnings of $1.70 a share.

For the full fiscal year, FedEx projects earnings of $6.40 to $6.70 a share. Its prior view called for a profit of $6.70 to $7.10 a share; analysts had an average forecast for earnings of $6.85 a share.

FedEx had already offered

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weaker-than-expected projections for the periods in its first-quarter report in September. But the company said Friday that its fuel costs have increased 8%, or $85 million, since that time.

FedEx, considered a bellwether for the U.S. economy, also said its less-than-truckload freight trends remain weak, despite signs that a decline in industrial production has hit a bottom.

Shares of FedEx were down 87 cents, or 1%, to $100.50 in premarket trading.