"The biggest challenge is the fact that so much of the business comes in such a short period of time, and obviously it is not possible to make these enormous capital investments for two or three weeks out of the year," Smith said on a conference call with analysts. "You can clearly go broke trying to deliver non-compensatory packages into people's homes."
Customers are limiting spending on higher-priced services. FedEx said that it was continuing to see a shift toward less profitable international services — the volume of international economy-class shipments rose 8 percent.
The Memphis, Tenn.-based company is still buying back its own stock, which reduced the number of shares by 3 percent from a year ago and boosted earnings per share.
Helane Becker, an analyst at Cowen and Co., said that investors would "give the company some slack" for the disappointing third quarter because of the slightly upbeat forecast for the May quarter and FedEx's moves to boost profit in its big express operations.
FedEx shares rose 56 cents to $139.13 in morning trading Wednesday. They began the day down 3.6 percent for this year after gaining 57 percent in 2013.