Shares of parcel delivery service FedEx (NYSE: FDX) fell slightly on Wednesday after the company said profitability for the year will be lower than its long term objective due to a slower economy.

FedEx reported reported earnings of $1.35 per diluted shares for its fiscal third quarter compared to a year ago which saw a diluted EPS of $1.38. Analysts polled by Thompson Financial had expected $1.33 EPS. The company's net income was $420 million, down 2 percent from $428 million a year ago.

In a conference call with analysts, the company said revenue was slower than anticipated due to the soft economy, weather which had been much worse than it had anticipated. Factors which offset those two items were fuel charges which were less than expected and a conclusion of several tax audits and appeals which resulted in reduced taxes.

Revenue at the firm was $8.59 billion, up 7 percent from $8.00 billion a year ago. Operating income was $641 million, down 10 percent from $713 million in the third quarter last year.

While the company anticipates long-term growth of 10 to 15 percent, the company says that slower economic growth and investments will affect earnings.

"Regardless, we remain highly focused on improving margins, cash flow and returns and are confident that we can achieve our long term earnings goals once economic conditions improve,' said Alan Graf, the firm's chief financial officer in a statement.

Shares of FedEx dropped 1.16 percent, or $1.30, to close at $110.99 in Wednesday trading on the New York Stock Exchange.

Graf said in a conference call that reaching its long term growth rate this year would need higher growth in the economy.

The company says that it will continue to invest in aircraft conversions and acquisitions, as well as expansion in China, its ground shipping, its national network and its partnership with Kinko's.

The company expects that earnings will be dragged down by its recent investments in China, but expected that it would last no more than 12 to 18 months.

Fedex