FedEx Corp raised its quarterly and full-year forecasts on Monday, citing strong volume growth, and its shares rose nearly 5 percent.

The economic bellwether sees more packages flowing through both its air and ground networks, said BB&T Capital Markets analyst Kevin Sterling.

This is macro-related, he said. It's a volume-driven story.

FedEx said it expected fiscal 2011 earnings of $4.60 to $5.20 per share, up from its previous forecast of $4.40 to $5.00.

Analysts on average were expecting $4.98 per share, according to Thomson Reuters I/B/E/S.

For the first quarter ending on August 31, FedEx raised its earnings forecast to a range of $1.05 to $1.25 per share, up from a prior view of 85 cents to $1.05 and ahead of analysts' estimates of $1.01.

Both FedEx and rival United Parcel Service are poised to benefit from even a slow economic recovery because during the downturn, they cut expenses and became more efficient, said Sterling, who has a buy rating on FedEx and a $100 price target. They're getting volume, which is growing the top line, and they've got leverage on the bottom line.

UPS shares also rose last week when the company raised its outlook while reporting second-quarter earnings.

Memphis, Tennessee-based FedEx also said it would restore its company match for 401(k) plans effective January 1, another sign of confidence, Sterling noted.

FedEx shares were up 4.8 percent at $82.72 in early New York Stock Exchange trading, while UPS gained 1.4 percent to $64.54.

(Reporting by Helen Chernikoff, editing by Gerald E. McCormick and Lisa Von Ahn)

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