FedEx (FDX) earnings matches analyst estimates

Shipping giant FedEx (NYSE: FDX) reported its fiscal first quarter 2009, posting EPS of $1.23 a share, a 22% drop year-over-year.

The two main reasons for the 22% hit to its quarterly profit are high fuel costs and a slowing U.S. economy, which resulted in a lower demand for the company's express deliveries. Revenues were actually up 8.4% to $9.97 billion.

While it would be premature to say that market conditions are improving for the company, FedEx believes that it is doing everything it needs to do in order to compete and succeed in this current environment. According to the company's CEO, Fred Smith, "FedEx is taking strong, proactive actions to manage through this difficult cycle.''

One method of offsetting rising fuel costs will be implemented in January 2009, when the company will be raising its rates by an average of 6.9% for U.S. and U.S. export services.

Looking ahead, the company raised its second quarter outlook to between $1.40 and $1.40, higher than the $1.35 that analysts consensus, and raised its full year 2009 guidance to between $4.75 and $5.25, versus the consensus of $5.18.

The market is reacting somewhat positively to this mornings report as the stock is up slightly in in pre-market trading.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.