FedEx Corp. said Friday it will cut its fiscal fourth-quarter earnings forecast, citing a spike in fuel costs on soaring oil prices by at least $100 million more than estimated.

The Memphis Tennessee-based company is now projecting earnings for the period ending May 31 of $1.45 to $1.50 a share, down from its previous outlook of $1.60 to $1.80 a share, according to a company statement. It was the second time FedEx has reduced its outlook this year.

On average, analysts surveyed by Thomson Reuters predict fourth-quarter earnings of $1.69 a share.

While we have dynamic fuel surcharges in place, they cannot keep pace in the short-term with rapidly rising fuel prices,'' Chief Financial Officer Alan Graf said in the statement.

Demand for express and freight shipments also has weakened as the U.S. economy continues to slow, he said.

Fuel expenses jumped $100 million, or 7 percent, since the company made its initial forecast, and have outpaced fuel surcharges, the transportation company said.

The steep rise in the cost of fuel is all the more painful at a time when overall demand for package and freight services has slumped due to the state of the U.S. economy. Oil futures jumped $2.27, or 1.8 percent, to $125.96 a barrel on the New York Mercantile Exchange, the fifth record settlement in a row.

FedEx dropped $2.87, or 3.2 percent, to $87.50 at 4:41 p.m. after the close of regular New York trading. Earlier, the shares had declined 3 percent to $90.37.