Updated from 8:28 a.m. EDTFedEx (FDX) - Get Report delivered fourth quarter-results that showed strong growth from year-ago levels, but it was the shipping giant's bullish expectations for 2005 that drove shares up 1.4% Wednesday.

FedEx announced net income of $412 million, or $1.36 a share, up 47% from the year-ago $280 million, or 92 cents a share. As expected, the company said it earned $1.33 a share excluding all items and charges, matching the Wall Street estimate and coming in-line with the company's bullish guidance from June 10.

And going forward, FedEx said the strong growth would continue. FedEx said that first-quarter earnings would come in between 90 cents and $1 a share, much higher than the 80 cents a share expected by Wall Street. For the full year, the company said it will earn between $4.20 and $4.40 a share, which cpmpares favorably eith the consensus estimate of $4.27.

FedEx shares were lately up $1.11 to $79.54.

The company said fourth-quarter revenue came in at $7.04 billion, better than the $6.8 billion expected and up 21% from the year-ago $5.83 billion. Total average daily package volume at FedEx Express and FedEx ground grew 7% year-over-year, spurred by strong domestic and international shipping demand.

"We have strong momentum in our business," said Fred Smith, CEO, president and chairman of the company, in a statement. "Our entire portfolio of transportation services is experiencing strong demand, especially in ground, international express and regional less-than-truckload services."

All of FedEx's segments performed well in the fourth quarter, with ground and express shipping both showing double-digit revenue gains.

Revenue from express shipments came in at $4.71 billion in the quarter, up 10% from a year-ago, with operating income of $407 million, up 38% from last year. The revenue and income growth are being driven by FedEx's progress in boosting operating margins at the unit, which came in at 8.6%, up from 6.9% the previous year. International priority shipments continues to outperform as well, with revenue growing 22% from last year.

Fourth-quarter ground revenue came in at $1.06 billion, passing the billion-dollar mark for the first time and rising 15% from last year, with operating income of $159 million, up 7% year-over-year. But unlike its express unit, where margins are expanding, the company's ground unit saw margins shrink to 15.1% from 16.2% a year ago.

"We are most impressed by accelerating ground volumes, up 12% vs. 6% last year, and domestic express volumes, up 2% year-over-year," said Jon Langenfeld, analyst at Baird, in reaction to the earnings. "We believe there is opportunity for further upward EPS revisions as we move through fiscal 2005.

The company also noted that its recent acquisition of Kinko's was a "bright spot" during the fourth quarter and was a factor behind the rising earnings guidance in 2005. In the fourth quarter, the company said Kinko's brought in $521 million in revenue, with operating income of $39 million.

FedEx continues to work to cut costs in hopes of boosting profit margins in its express shipping business. The company said it realized $65 million in cost savings during the fourth quarter, with $150 million in savings for the fiscal year. Going forward, the company reaffirmed its earlier cost savings guidance of $230 million to $240 million for the fiscal year.