FedEx, the global package delivery company, just announced its fiscal Q3 financial results, and at first glance it's not encouraging.

Adjusted earnings came in at $1.23 per share, which is way below the $1.38 expected.

"The third quarter was very challenging due to continued weakness in international air freight markets, pressure on yields due to industry overcapacity and customers selecting less expensive and slower-transit services,” said CEO Fred Smith.

Management blames Asia, which also forced them to slash forward guidance.

They cut Q4 EPS guidance to a range of $1.90 to $2.10. Analysts were looking for $2.12.

"Our lower-than-expected results for the quarter and reduced full-year earnings outlook were driven by third quarter international revenues declining approximately $100 million versus our guidance primarily due to accelerating customer preference for lower-yielding international services, lower rate per pound and weight per shipment,” said CFO Alan B. Graf Jr. “We expect these international revenue trends to continue. We have other actions under way beyond those already included in our profit improvement program. Some of these additional actions may involve temporarily or permanently grounding aircraft, which could result in asset impairment or other charges in future periods."

"In response, beginning April 1, FedEx Express will decrease capacity to and from Asia and will aggressively manage traffic flows to place low yielding traffic in lower-cost networks," said Smith.