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"We have taken decisive actions during the economic downturn to reduce expenses while expanding our networks in growth markets," said chairman Frederick Smith.

FedEx Corp Q2 results:

• Revenue down 10% to $8.6 billion (Q2 2008 $9.54bn)
• Operating income down 27% to $571 million (Q2 2008: $784m)
• Operating margin down to 6.6% (Q2 2008: 8.2%)
• Net income down 30% to $345 million (Q2 2008: $493m)
• Revenue and earnings declined as a result of lower yields, primarily due to a substantial decline in fuel surcharges year over year.

FedEx Express:

• Revenue down 13% to $5.31 billion (Q2 2008 $6.1bn)
• Operating income down 36% to $345 million (Q2 2008: $540m)
• Operating margin down to 6.5% (Q2 2008: 8.9%)
• Operating income and margin declined year-on-year, as last year's results significantly benefited from falling fuel prices and the related fuel surcharge timing lag.
• Continued reductions in network operating costs driven by fewer flight hours and improved route efficiencies, along with other aggressive actions to control spending, partially offset the negative impact of fuel price.

FedEx Ground:

• Revenue up 3% to $1.84 billion (Q2 2008: $1.79bn)
• Operating income up 12% to $238 million (Q2 2008: $212m)
• Operating margin up to 13% (Q2 2008: 11.9%)
• FedEx Ground average daily package volume was up 4%, and FedEx SmartPost average daily volume grew 63%, aided by gains from DHL's exit from the US domestic package market.

FedEx Freight:

• Revenue down 11% to $1.07 billion (Q2 2008: $1.2bn)
• Operating loss of $12 million, compared with an operating income of $32 million in Q2 2008
• Operating margin of -1.1%), down from 2.7% in Q2 2009
• Average daily LTL shipments increased by 3% year-on-year and growth rates improved month-on-month throughout the quarter.
• Operating income and margin decreased in the quarter due to the competitive pricing environment, partially offset by higher shipments.

"Our balance sheet is strong, volumes are growing, and we are encouraged by our performance as we emerge from the worst economic downturn in FedEx history," said Alan Graf Jr, FedEx Corp. executive vice president & chief financial officer. "While there is some uncertainty regarding the sustainability of current demand trends after our peak shipping season, we expect our strong operating leverage to provide improved year-over-year profitability in the second half of our fiscal year.  Effective cost management remains a priority and should continue to benefit results."

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