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FedEx cuts profit forecast due to fuel prices

BOSTON
Fri May 9, 2008 4:45pm EDT

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FedEx courier Robbie Rogers delivers packages in Chicago's North Side, Chicago, Illinois, November 21, 2006. REUTERS/Nick Carey

BOSTON (Reuters) - Package delivery company FedEx Corp (FDX.N) slashed its quarterly earnings forecast on Friday, blaming surging fuel prices.

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FedEx said it now expects to report a profit of $1.45 to $1.50 per share for its fourth fiscal quarter ending May 31, lower than its prior forecast of $1.60 to $1.80 per share.

The company, based in Memphis, Tennessee, said that since it made its fourth-quarter profit forecast in March its estimated fuel costs for the period have risen by $100 million, or 7 percent.

"While we have dynamic fuel surcharges in place, they cannot keep pace in the short-term with rapidly rising fuel prices," Alan Graf, chief financial officer, said in a statement. "This revised outlook assumes no additional increases to the current fuel price environment and no further weakening of the company."

FedEx shares, which had closed at $90.37 on the New York Stock Exchange, tumbled $2.67, or 3 percent, to $87.70 in after-hours trading.

(Reporting by Scott Malone, Editing by Richard Chang, Toni Reinhold )
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