FedEx profit fell 6 percent in the company's third quarter, which ended Feb. 29, even as revenue grew 10 percent.

A slowing U.S. economy allowed volume growth only through higher costs of doing business. The costs of retail service enhancement initiatives, increased marketing and technology expenses and higher expenses at FedEx Ground offset gains that came from acquisitions and 5 percent volume growth at FedEx Ground and FedEx International Priority.

Revenue for the quarter was up 10 percent to $9.44 billion. Operating income was unchanged at $641 million. With an operating margin down from 7.5 percent a year ago to 6.8 percent, net income fell 6 percent to $393 million.

"FedEx faces a challenging economic environment that includes persistently high oil prices, sluggish U.S. growth and continued concerns in the credit markets," said Frederick W. Smith, chairman, president and CEO. "We are managing our costs while positioning our portfolio of global transportation solutions to increase our profitability and returns once conditions improve."

FedEx expects earnings in the next quarter to be down 8 percent compared with last year, assuming no additional increases to current fuel prices and now further weakening to the economy. FedEx reduced its capital spending estimate to $3 billion.

"Our fourth quarter earnings outlook has been impacted by higher than anticipated fuel prices and a weak U.S. economy," said Alan B. Graf, Jr., executive vice president and chief financial officer.