FedEx Corp is expected to report higher quarterly results than a year ago Thursday, but analysts are more keen to see if the No. 2 package delivery company cuts its full-year guidance because stalled global economic growth has stifled volume.

Shares of the Memphis-based company have fallen 22 percent this year, reflecting a U.S. economy that is treading water at best, as well as slower international flows than many analysts expected.

Businesses continue to keep inventory lean based on weak consumer sentiment, containing shipment volume and heightening the focus on cost controls to boost profits, analysts said.

Since the company's last conference call, Asian freight markets have slowed and yields on transpacific cargo are moderating, as has the domestic U.S. Express parcel market and U.S. industrial production, Sterne Agee analysts Jeff Kauffman and Salvatore Vitale wrote in a report.

We are interested in seeing whether or not this results in slower deployment of Capex dollars.

FedEx runs the world's largest cargo airline. The company is considering buying about 50 wide-body freighters from Boeing Co and Airbus to update its fleet.

Wall Street analysts expect FedEx's first-quarter profit, on average, to rise to $1.45 per share, compared with $1.20 a year ago, according to Thomson Reuters I/B/E/S.

Revenue is estimated at $10.32 billion in the quarter ended August 31, up from $9.46 billion a year ago.

FedEx in June estimated fiscal 2012 profit of between $6.35 and $6.85 per share.

On average, the full-year forecast is $6.37 per share after a wave of price target reductions by Wall Street analysts. Forecasts range from $5.75 to $7.05 a share.

Sanford C. Bernstein analysts pointed to the softer macro outlook and international trade for its downward revision in FedEx earnings and near-term growth forecasts.

Slower international trade growth will limit the company's ability to capitalize on recent international expansion and will make it more difficult for the company to improve international express and freight yields, the analysts led by David Vernon wrote in a report.

While growth expectations are coming down, the capex numbers are still going to go up -- to over 10 percent of sales -- and while we don't doubt the need to replace aging aircraft technology it will be some time before these investments pay off for investors.

Sustained pricing power could minimize the downside, analysts said.

The sheer volume of goods moved by FedEx makes its shipment trends a bellwether for consumer demand and economic growth.

FedEx handles packages equivalent to about 4 percent of U.S. gross domestic product and 1.5 percent of global GDP in its trucks and aircraft.

U.S. GDP grew at a 1 percent annual rate in the second quarter and just 0.7 percent in the first half of the year, weighed down by high gasoline prices and supply chain disruptions after the March earthquake and tsunami in Japan.

The Federal Reserve on Wednesday ramped up aid to the U.S. economy, warning of significant downside economic risks, including global financial markets strains.

Wolfe Trahan said in a report that FedEx likely needs strong global demand to utilize new and larger aircraft fully. The analysts thus see material risk to FedEx's full-year guidance, which is based on U.S. GDP assumptions of 3.5 percent in the second half of this year and 3 percent next year.

We continue to believe that UPS and FedEx are positioned to receive solid pricing over the next several years despite a slowing economy, and a more realistic FedEx outlook would be a positive for the shares at current levels, the analysts added.

United Parcel Service Inc , the largest package delivery company, in an investor meeting last week, affirmed its call for record 2011 earnings, downplaying the likelihood of a double-dip recession.

FedEx shares closed on Wednesday at $72.50, down 22 percent this year, compared with the 16 percent drop in the Dow Jones Transportation average <.DJT>.

(Editing by Andre Grenon)

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