FedEx cuts 2013 profit target, shares fall 2%

FedEx Corp lowered its fiscal 2013 profit target on Tuesday, saying earnings could slide as much as 6% for the year, as a weakening world economy prompts customers to shift toward lower-priced and slower shipping options.

The world's second-largest package delivery company said it now expects profit for its fiscal year, which ends in May, to come to $6.20 to $6.60 per share, below its prior forecast of $6.90 to $7.40 a share.

Wall Street had expected a full-year profit of $7.03 per share.

FedEx's shares fell 2% to $87.35 in premarket trading from Monday's close of $89.28 on the New York Stock Exchange.

"Weak global economic conditions dampened revenue growth (and) drove a shift by our customers to our deferred services," Chief Financial Officer Alan Graf said in a statement.

Earlier this month, FedEx had warned the slowing economy was hurting its results, following larger rival United Parcel Service Inc <UPS.N>, which in July cut its 2012 profit forecast.

Net income for its fiscal first quarter that ended August 31, was $459 million, or $1.45 per share, down 1% from $464 million, or $1.46 per share, a year earlier.

That figure is well below the $1.56 analysts on average had looked for prior to the company's profit warning early this month, but above Wall Street's revised earnings target of $1.40 per share, according to Thomson Reuters I/B/E/S.

Total revenue rose 3% to $10.79 billion.

Profit was heavily weighted by the company's express segment, which handles overnight package delivery by aircraft, where operating earnings fell 28%. The segment reported a 5% drop in U.S. package deliveries.

Memphis, Tennessee-based FedEx said it will raise its average shipping rates 3.9% in the United States starting January 7.