After FedEx warned last week that its fiscal first quarter results were hit by weak global demand, it announced rate hikes and detailed its cost-cutting efforts.
FedEx shares were marginally higher Thursday.
The company had preliminary revenue and earnings that fell short of expectations. The CEO believes that the economy will enter a worldwide recession. The company said it would cut costs.
The shipping giant had trouble with light volumes in the quarter. The poor results shocked the market as investors tried to distinguish market troubles from FedEx's own internal problems.
The company said that its Express, Ground and Home Delivery rates will increase in the first quarter. FedEx said that its freight rates will increase by an average of 6.9% to 7.9%.
It believes it will save between 1.5 billion and 1.7 billion by parking planes. FedEx Ground will save between $350 million and $500 million as a result of the closing of certain locations, the suspension of some Sunday operations, and other expenses.
FedEx said it will save up to half a billion dollars by reducing vendor use.
"We're moving with speed and agility to navigate a difficult operating environment, pulling cost, commercial, and capacity levers to adjust to the impacts of reduced demand"
The company expects to save between $2.2 billion and $2.27 billion in the next fiscal year.
FedEx stood by its projections despite last week's warnings. The company expects revenue and earnings per share to increase over the course of the year.
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