FedEx Corp reported a quarterly profit on Wednesday that beat analyst expectations, but said costs would constrain its 2011 earnings, sending its shares down in premarket trading.

The company projected 2011 earnings per share in the range of $4.40 to $5.00.

We expect the growth in earnings in fiscal 2011 to be constrained, Chief Financial Officer Alan Graf Jr. said in a statement, citing increases in fixed pension and aircraft maintenance expenses, in addition to higher anticipated healthcare costs.

The consensus is above the top end of that range, BB&T analyst Kevin Sterling said of the outlook. So that tells you that estimates need to come down. What's constraining their earnings is their costs.

For the fourth quarter that ended May 31, Memphis-based FedEx posted earnings of $696 million, or $1.33 per share, compared with a year-earlier loss of $849 million, or $2.82 per share.

Analysts had expected earnings of $1.32 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 20 percent to $9.43 billion as the global economy continued to recover from the recent recession, sending package volumes higher.

Resumed growth in industrial production and global trade is increasing demand for our transportation services, Graf said.

The company said it had earned 64 cents a share in the year-earlier period before charges, mainly to write down the value of its acquisitions of Kinko's Inc and Watkins Motor Lines.

Shares of both FedEx and rival United Parcel Service Inc are down about 10 percent in the past six weeks, reflecting the broader market's recent slide on concerns that several European nations might default on their debt.

FedEx shares were down 2.8 percent at $80.70 during premarket trading.

(Reporting by Helen Chernikoff; Editing by Lisa Von Ahn and Maureen Bavdek)

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