Hey, FedEx (NYSE: FDX) beat the estimates of Wall Street! That's awesome, right? Not in this case. The nemesis of United Parcel Service (NYSE: UPS) reported Q2 numbers on Thursday, and they didn't matter for the most part. What mattered more was that management seemed to be in a frantic mood over cutting costs and capital expenditures.

According to this article, FedEx only managed to deliver (yes, I used that word on purpose) a four-cent rise in earnings per share; they came in at $1.58, one penny higher than what analysts expected. Problem for FedEx is this lousy economy. The company will have a hard time ensuring that it can deliver (there's that word again) on its promised guidance for the rest of the year. Simply put, if the economy continues to sour, and if confidence doesn't bounce back soon, then there will be less demand for its services. No complex arguments necessary for this thesis, so far as I can tell. I would imagine that it's going to be rough for management to keep employee morale going at an acceptable level with all the cost reductions and job cuts that are being used to navigate the stormy seas. One of the worst problems I see is the minimum one-year freeze on 401(k) company matching contributions that was mentioned in the press release. Seriously, that will be a bitter pill to swallow for many.

I personally would stay away from FedEx's stock. Yes, it is well off its highs, but is all the bad news priced in the stock? My opinion: not on your life. I cannot see how anyone could read that earnings release and subsequently decide to buy shares of the company. The commentary is kind of unnerving, if you ask me. CEO Frederick W. Smith thinks the current financial climate is one of the worst seen in the company's history. Tell us something we didn't already know, buddy! What I find unnerving is that I really don't get a sense that there's any sort of plan beyond the cuts. The company is just looking to survive as best it can. I wish FedEx luck, but I don't want to get involved with the stock. At all.

Disclosure: I don't own any company mentioned; positions can change at any time.

Fuel prices and the soft economy continue to plague FedEx Corp. (NYSE: FDX), that was clear when this week the company reported results for for the second quarter ended November 30, though these challenges were offset somewhat by solid international growth. Earnings were $1.54 per diluted share, compared to $1.64 a year ago, and the $1.50 expected by analysts surveyed by Thomson Financial. Revenue was $9.45 billion, up 6% from $8.93 billion the previous year, though the net income of $479 million was down 6% from the previous year.

FedEx expects earnings to be $1.15 to $1.30 per diluted share in the third quarter, compared to $1.35 a year ago and less than the $1.32 expected by analysts. For the full year, the company expects earnings of $6.40 to $6.70 per diluted share, in line with the $6.42 expected by analysts.

The share price fell just a little over 1% on Thursday to close at $93.63, but partially bounced back on Friday to close at $94.40. This is up from the 52-week low of $91.10 in late November after FedEx lowered its guidance, but well off the 52-week high of $121.42 back in February. Returns are down about 13% since the beginning of the year.

FedEx CEO Frederick W. Smith, said, "While we see challenging near-term economic trends, we remain confident about long-term prospects in all our business segments." Well, what else was he going to say?