FedEx Corp. reported earnings of $1.45 per diluted share for the first quarter ended August 31, 2012, compared to $1.46 per share last year. Revenues were $10.79 billion, up 3 per cent from $10.52 billion a year ago. Net income declined 1 per cent from last year’s level of $464 million, to $459 million.

“As we announced on September 4, weakness in the global economy constrained revenue growth at FedEx Express during our first quarter and affected our earnings,” said Frederick W. Smith, FedEx Corp. Chairman, President and Chief Executive Officer. “Meanwhile, our FedEx Ground and FedEx Freight segments performed well, with both improving their year-over-year operating margins. We are taking further actions to reduce costs and adjust our networks to match current and anticipated shipment volumes.”

During the quarter, improved FedEx Freight results and the continued strong performance at FedEx Ground were more than offset by lower demand for priority services at FedEx Express.

FedEx projects earnings to be $1.30 to $1.45 per diluted share in the second quarter and $6.20 to $6.60 per diluted share for fiscal 2013, compared to the company’s previous full year forecast of $6.90 to $7.40 per diluted share. This guidance assumes the current market outlook for fuel prices and does not include the impact of the cost reduction programs currently under review. The company reported earnings of $1.57 per diluted share in last year’s second quarter. The capital spending forecast for fiscal 2013 remains $3.9 billion.

“Earnings for the first quarter were below our expectations as weak global economic conditions dampened revenue growth, drove a shift by our customers to our deferred services and outpaced our near-term ability to reduce FedEx Express operating costs to match demand levels,” said Alan B. Graf, Jr., FedEx Corp. Executive Vice-President and Chief Financial Officer.