Package delivery company FedEx Corp reported a sharply lower quarterly profit due to the global economic downturn and said it was taking fresh actions to cut costs.

The Memphis-based company reported net income for its fiscal third quarter, ended February 28, of $97 million, or 31 cents a share, down more than 75 percent from $393 million, or $1.26 a share, a year earlier.

Analysts had expected 46 cents a share, according to Reuters Estimates.

Like its main rival, Atlanta-based United Parcel Service Inc, FedEx is considered a bellwether of U.S. economic activity. When the economy does well, companies and consumers ship more goods; in a recession, package volumes drop.

FedEx said third-quarter revenue fell 14 percent to $8.14 billion.

Continue Reading Below

The company said it was cutting capacity at its FedEx Express and FedEx Freight units, and reducing personnel and work hours.

FedEx said the measures would result in fourth-quarter charges of roughly $100 million and lead to a reduction in expenses of about $1 billion in its 2010 fiscal year.

In premarket trade FedEx shares were down 4.2 percent at $41.25.

(Reporting by Nick Carey, editing by John Wallace)