FedEx increased its earnings target for 2006 and said the US economic outlook remained stable, after announcing a 35 per cent increase in third-quarter profits.
The better-than-expected results were driven by strong growth in US ground deliveries during the busy Christmas holiday season and continued expansion in international express business.
Net profits for the quarter ended February 28 were $428m, or $1.38 a share, compared with $317m, or $1.03 a share, in the same period last year.
The results easily exceeded Wall Street's consensus forecast of $1.30 a share.
FedEx upped its earnings forecast for the full 2006 fiscal year to a range of $5.66-$5.81 a share, from its previous target of $5.45-$5.70.
Fred Smith, FedEx chief executive, said the US economy remained robust and predicted it would grow 3.2 per cent during the company's 2007 fiscal year, which begins in June.
Express delivery companies are considered economic bellwethers because of their central role in many corporate supply chains.
Total third quarter sales rose 9 per cent to $8bn.
Revenues from domestic ground deliveries surged by 14 per cent, while the express air network enjoyed a 9 per cent jump.
The strongest express growth came from Asia and Europe, lifting international revenues by 12 per cent.
FedEx Freight, the company's domestic trucking business, increased sales by 14 per cent.
The biggest disappointment was a 36 per cent decline in operating income from the FedEx Kinko's retail chain, which provides parcel shipping services and office supplies.
Shares in FedEx moved modestly on Wednesday, ending the session 1.1 per cent higher at $114.44.