FedEx 3Q earnings drop

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FedEx Corp. said third-quarter profits fell for the first time in three years to 2 percent, as a slowing U.S. economy, lower fuel surcharges and winter storms damped shipping demand.

Net income of $420 million dropped from $428 million a year ago, Memphis-based FedEx said. The company also reported an operating margin of 7.5 percent, down from last year's 8.9 percent, and operating income of $641 million, down 10 percent from $713 million a year ago. Revenue, however, was $8.59 billion, up 7 percent from $8 billion the previous year.

"The U.S. economy grew at a lower rate than we expected in the third quarter and we saw continued adjustments in the automotive and housing markets," said Frederick W. Smith, president/CEO of FedEx Corp., in a teleconference last week. "I believe, however, this represents a healthy transition for the economy as it phases into a more sustainable growth rate. FedEx is in excellent position to take full advantage of global economic growth trends and deliver overall outstanding financial results in the long run."

FedEx saw total combined average daily-package volume at FedEx Express and FedEx Ground grow 4 percent year over year for the quarter, led by ground and international express package growth.

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