Ahead of the Bell: Apple to post 2Q earnings

Apple Inc., maker of Macintosh computers, iPods and the iPhone, is expected to report a small drop in quarterly earnings after the closing bell Wednesday as the economic downturn and an anticipated replacement for the iPhone compounded a seasonally slow quarter.

Analysts surveyed by Thomson Reuters expect Apple ( AAPL - news - people ) to earn $1.09 per share on $8 billion in sales.

U.S. Mac shipments slipped about 1 percent in the quarter, according to researchers at IDC and Gartner Inc. ( IT - news - people ) Analysts are divided on whether the Cupertino, Calif.-based company sold as many iPods, iPhones and Macs as expected.

Investors will parse Apple executives' comments for evidence that a new iPhone is being readied for June. Rumors point to an announcement at a developer conference.

They'll also be looking for word that Chief Executive Steve Jobs will return from medical leave at the end of June as planned. Jobs, a survivor of pancreatic cancer, in January said his health problems were more complicated than an easily treatable hormone imbalance.

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 (nyse: FDX - news - people ) will also implement a 5 percent pay cut for all remaining U.S. "salaried exempt" personnel.

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.