Updated from 10:31 a.m. EDT

FedEx

(FDX) - Get Report

, the world's largest air express delivery company, reported fourth-quarter earnings Wednesday that exceeded the expectations of Wall Street analysts.

The company said earnings-per-share rose to 85 cents, up 16% from the 73 cents earned in last year's fourth quarter and 4 cents up on the Wall Street consensus of 81 cents a share, according to

First Call/Thomson Financial

.

Net income for the quarter was $245 million, up from $221 million in the same period last year. Meanwhile, revenues rose 11%, from $4.4 billion to $4.9 billion.

In a statement, the company highlighted robust growth in its premium FedEx International Priority service, which saw revenue grow 21%, as key to its earnings jump.

Weighing on costs were increased fuel prices, which resulted in $84 million in additional expenses. The increase was offset, however, by revenue generated by fuel surcharges at FedEx Express, which increased 3% to 4% in April.

At the same time, the company reported year-end earnings figures which showed that net income rose from $631 million in fiscal 1999 to $688 million in fiscal 2000, a 9% jump. Revenue was also up about 9%, from $16.77 billion to $18.26 billion.

Looking ahead to fiscal 2001, FedEx, based in Memphis, Tenn., said it intends to improve services to small and medium-sized businesses by offering more choices for both express services and cheaper, ground-based transportation. "While there may be increased expenses resulting from the new initiatives, particularly in the first quarter, we anticipate another record year for sales and profit as well as improving returns and cash flow," Alan Graf Jr., executive vice president and chief financial officer, said in a statement.

FedEx closed at 38 1/8, up 1 1/8 or 3%.