Information Security & US & Life & Love & Fashion & Hacking & Passion

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.

FedEx Corp. reaffirmed Wednesday it plans to grow revenue by 10 percent and earnings per share by 10 to 15 percent per year.

In fiscal 2008, the package delivery company reported a profit of $3.60 per share on revenue of $37.95 billion.

In a copy of its Corporate Citizenship Report obtained in advance of its official release by The Associated Press, the package delivery company also said it aims to cut aircraft carbon dioxide emissions and truck fuel efficiency by 20 percent over the next 12 years.

Since 2005, FedEx has cut carbon emissions across its air fleet by about 4 percent per available ton mile and driven nearly 14 percent in vehicle fuel efficiency improvements.

Initiatives to reduce fuel consumption include fleet upgrades, flight planning adjustments and efficiency improvements.