FedEx Corp. said Thursday its fiscal second-quarter earnings rose 3 percent, narrowly topping Wall Street's expectations, but it announced further cost cuts as demand continues to slump.
Chief Executive Frederick W. Smith said the company's earnings are "increasingly being challenged by some of the worst economic conditions in the company's 35-year operating history."
The Memphis, Tenn.-based company earned $493 million, or $1.58 per share, compared with a year-ago profit of $479 million, or $1.54 per share. Revenue rose 1 percent to $9.54 billion.
Analysts polled by Thomson Reuters predicted a profit of $1.57 per share on revenue of $9.87 billion.
The package delivery company said it will implement pay cuts for senior executives and a 1-year freeze on 401(k) contributions. On Jan. 1, CEO Smith will take a 20 percent pay cut, and other top brass will take a reduction in pay between 7.5 percent and 10 percent.
FedEx
Combined, the company expects these measures to save $200 million through the remainder of the fiscal year ending in May and $600 million in the next fiscal year.
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