United Parcel Service Inc , the world's largest package delivery company, reported higher second-quarter profit and reaffirmed its 2011 outlook despite a sputtering economic rebound.

International shipment volume escalated while domestic deliveries stayed flat because of the tepid U.S. economy.

International growth is really bearing fruit for them, said Kevin Sterling, BB&T analyst. The thing that caught my eye is they continued to add flights in and out of China.

UPS handles goods equal to 6 percent of the U.S. gross domestic product and 2 percent of global GDP in its trucks and planes, so its shipment trends give a tangible view of consumer demand.

Global trade is a key focus at UPS, as CEO Scott Davis is on the President's Export Council that aims to drive U.S. business growth by doubling exports by 2015.

The company's pricing also improved, up 7 percent from a year ago for international shipments and 6.3 percent for domestic, Sterling said.

In April, when UPS raised its 2011 guidance to the current level of between $4.15 and $4.40 per share, it noted its cost-containment efforts and little customer resistance to higher rates.

Atlanta-based UPS on Tuesday reported net earnings of $1.063 billion, or $1.07 per share, up from $845 million, or 84 cents a share a year ago.

Adjusted earnings were $1.05 per share, slightly beating the $1.04 per share that economists expected on average, according to Thomson Reuters I/B/E/S.

We remain confident in our ability to execute and surpass prior peak EPS this year, Kurt Kuehn, chief financial officer, said in a statement.

The highest second quarter earnings per share on record were driven by the quality of revenue in the U.S. domestic, superior export volume growth in International and record supply chain & freight results, he said.

Revenue rose to $13.2 billion from $12.2 billion a year ago, slightly edging above analyst forecasts of $13.14 billion.

The company's shares dipped 0.9 percent in premarket trading to $73.40 after closing at $74.05 on the New York Stock Exchange.

(Reporting by Lynn Adler, editing by Dave Zimmerman)

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