By Lisa Baertlein and Nathan Gomes

(Reuters) -FedEx Corp on Thursday outlined cost cuts of up to $2.7 billion from parking planes, suspending some Sunday deliveries and shuttering corporate offices after falling demand hammered first-quarter profits.

The company reported that earnings per share fell 21.3% for the quarter ended Aug. 31, in line with the warning it delivered last week. It blamed a rapidly deteriorating global economy, but analysts and investors were skeptical – in large part because revenue increased 5.5%.

FedEx (NYSE:) committed to repurchasing $1.5 billion of FedEx common stock this fiscal year, including $1 billion in the current quarter, even as the company confirmed investors’ and analysts’ suspicion that it did not cut costs fast enough to offset the hit to demand.

“The impact of cost actions lagged volume declines and operating expenses remained high relative to demand,” FedEx said in a release detailing its plans to cut costs by $2.2 billion to $2.7 billion in fiscal 2023.

“We’re moving with speed and agility to navigate a difficult operating environment, pulling cost, commercial, and capacity levers to adjust to the impacts of reduced demand,” said Chief Executive Raj Subramaniam, who was promoted lead the company in June.

FedEx said it booked $300 million in first-quarter savings and plans to slash expenses by $700 million in savings in the current second quarter.

The company said other expense reductions would come from cutting FedEx Express flights, trimming variable incentive compensation meant to motivate and retain workers, closing certain package sorting centers, and delaying certain projects.

On the revenue side, FedEx announced plans to raise average rates by 6.9% starting on Jan. 2.

“I am confident the cost actions we’re implementing with urgency will enhance efficiency and drive improved profitability in support of our long-term financial targets,” FedEx Chief Financial Officer Michael Lenz said.

News that the company had plans for reducing excess capacity sent shares 0.8% to close at $154.54. Earlier in the session they touched a 52-week low of $150.36.

Last week, the Memphis-Tennessee-based company said adjusted earnings per share for the quarter ended Aug 31 fell to $3.44 from $4.37 a year earlier, even though revenue rose to $23.2 billion from $22 billion. It also pulled its full-year forecast, blaming macroeconomic weakness in Asia, service challenges in Europe and soft revenue in its U.S. Ground delivery unit.

“They sound a lot more confident today that they’ve got a plan in place. They’re able to quantify the plan,” said David Katz, chief investment officer at Matrix Asset Advisors in White Plains, New York, which holds about 58,000 FedEx shares.

“They’re still not giving guidance for the year. However, they definitely are giving a lot more detail in terms of the plan,” Katz said.

With the share repurchase announcement, FedEx threw a bone to frustrated investors, who have been waiting for a turnaround at the company where profits have lagged those of rival United Parcel Service (NYSE:).

“If the wheels were truly falling off or they did not have confidence that their plan was going to work, they might suspend the share buy back,” investor Katz said.

“They’ve got a lot to overcome, but at least it’s a start,” said Gary Bradshaw, a portfolio manager with Hodges Capital Management in Dallas, which owns FedEx shares.