12:15PM New York – FedEx swings to a loss and Morgan Stanley earnings dropped. Lindsay Corp dropped 30% before recovering.

U.S. stocks dropped in the morning hours after weaker than expected earnings from FedEx, Morgan Stanley and Fifth Third Bancorp plans to raise $2 billion.

FedEx reported loss in the fourth quarter on higher fuel costs and asset write down. Morgan Stanley earnings dropped 57% as revenues in the investment banking fell. Fifth Third Bancorp plans to raise $2 billion to maintain its capital reserve requirements above the required by the Fed.

FedEx Corporation provider of freight and parcel delivery services reported fourth quarter revenues increased 8% to $9.87 billion from $9.15 billion a year ago. Net loss in the quarter was $241 million or 78 cents per diluted share compared to net income of $610 million or $1.96 per share, a year ago.

Revenue in the year rose 8% to $38.0 billion from $35.2 billion the previous year. Operating income declined 37% in the period. Net income fell 44% to $1.13 billion from $2.02 billion a year ago. Earnings per share fell 44% to $3.60 from $6.48 per share a year ago. Capital spending for fiscal 2008 was $2.9 billion.

FedEx estimates lower earnings in the first quarter of fiscal 2009 on higher fuel prices and weaker U.S. economy. FedEx projects first quarter earnings between $0.80 and $1.00 compared to $1.58 per share a year ago when crude oil averaged about $70 a barrel. The company estimated fiscal 2009 earnings between $4.75 and $5.25 per share.

FedEx Corporation (FDX: chart) in the last one year traded as high as $119.10 in July 2007 and as low as $80.00 in March 2008. Based on the yesterday’s closing price the company has a market cap of $26.15 billion.

Earnings Review

CarMax, Inc, a retailer of used cars reported first quarter sales increased 3% to $2.21 billion from $2.15 billion a year ago. Net income in the quarter decreased 55% to $29.6 million or 13 cents per diluted share compared to net income of $65.4 million or 30 cents per share, a year ago. Comparable store used sales rose 1% for the first quarter. Total vehicles unit sales grew 10% for the first quarter.

CarMax, Inc (KMX: chart) in the last one year traded as high as $27.42 in July 2007 and as low as $15.81 in January 2008. Based on the yesterday’s closing price the company has a market cap of $4.01 billion. CarMax stock fell $2.41 to $16.15 in the morning trading.

Commercial Metals Company, a recycler and distributor of steel and metal products reported third quarter sales increased 24.13% to $2.9 billion from $2.2 billion a year ago. Net income in the quarter declined 67.05% to $59.5 million or 51 cents per diluted share compared to net income of $99.4 million or 82 cents per share, a year ago.

Commercial Metals Company (CMC: chart) in the last one year traded as high as $38.39 in June 2008 and as low as $20.85 in January 2008. Based on the yesterday’s closing price the company has a market cap of $4.15 billion. In the morning trading Commercial Metals stock increased $1.29 to $37.72.

Lindsay Corporation, a provider of irrigation systems and infrastructure products reported third quarter revenues increased 54% to $143.6 million from $93.1 million a year ago. Net income in the quarter increased 47% to $14.1 million or $1.15 per diluted share compared to net income of $7.5 million or 62 cents per share, a year ago.

Lindsay Corporation (LNN: chart) in the last one year traded as high as $131.14 in April 2008 and as low as $34.84 in June 2007. Based on the yesterday’s closing price the company has a market cap of $1.48 billion. In the morning trading stock fell $25.80 to $98.80.

Morgan Stanley, second largest investment bank reported second quarter revenues dropped 38% to $6.51 billion from $10.52 billion a year ago. Net income in the quarter plunged 61% to $1.01 billion or 95 cents per diluted share compared to net income of $2.57 billion or $2.45 per share, a year ago.

Morgan Stanley (MS: chart) in the last one year traded as high as $76.79 in June 2007 and as low as $33.56 in March 2008. Based on the yesterday’s closing price the company has a market cap of $44.94 billion. Morgan Stanley stock dropped $1.82 to $38.81.

Cascal B.V, a leading provider of water and wastewater services in seven countries said fourth quarter revenues rose 19% to $40.4 million from $34.4 million a year ago. Net income in the quarter declined 62.07% $2.6 million or 9 cents per diluted share compared to net income of $4.2 million or 19 cents per share, a year ago.

For the fiscal year ending March 31, 2009, the company maintained its previously stated annual guidance of revenue between $179 million and $184 million and operating earnings between $68 million and $71 million.

Cascal B.V (HOO: chart) in the last one year traded as high as $15.19 in April 2008 and as low as $9.82 in June 2008. Based on the yesterday’s closing price the company has a market cap of $365.35 million.

CLARCOR Inc, Filtration systems maker said second quarter revenues rose 14% to $267.1 million from $235.1 million a year ago. Net income in the quarter increased 18% $24.6 million or 48 cents per diluted share compared to net income of $20.9 million or 41 cents per share, a year ago.