MEMPHIS, Tenn. (

TheStreet

) --

FedEx

(FDX) - Get Report

said net income in its fiscal first quarter fell 53%, but reiterated that it sees "a continued modest recovery in the global economy."

The overnight package company earned $181 million or 58 cents a share, in line with estimates after it preannounced last week. Revenue fell 20% to $8 billion. Analysts surveyed by Thomson Reuters had estimated $8.2 billion. In the same period a year earlier, FedEx earned $384 million or $1.23 a share.

CEO Fred Smith, in a prepared statement, said better-than-expected volume in international priority shipping, as well as cost controls "helped drive financial performance above our initial expectations." Nevertheless, results reflected the impact of the global recession as well as a substantial decline in fuel surcharges.

FedEx reiterated earnings expectations, announced last week, of 65 cents to 95 cents in the current quarter, reflecting "a continued modest recovery in the global economy." In the same period a year earlier, the company earned $1.58 a share, benefitting from declining fuel prices and the lag in fuel surcharges. "While we see signs of improvement in the economy, the year-over-year comparisons will remain very difficult for our second quarter," said CFO Alan Graf, in a prepared statement.

FedEx Express said it will increase shipping rates by an average of 5.9% for U.S. domestic and U.S. export services, effective Jan. 4, 2010. The impact will be a two-point reduction in fuel surcharge.

In the first quarter, revenue at FedEx Express fell 23% to $4.92 billion. Operating income fell 70% to $104 million. Revenue at FedEx Ground fell 2% to $1.73 billion, while operating income rose 7% to $209 million. Revenue at FedEx Freight fell 27% to $982 million, while operating income fell 98% to $2 million.

-- Written by Ted Reed in Charlotte, N.C.

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