Income and revenue rose during the peak holiday season at FedEx, but higher fuel costs helped keep profit below Wall Street's forecast.
Holiday-season package volume was the heaviest ever, as the big package-delivery company continues to benefit from the growth in online shopping.
The drawback is that unlike deliveries to businesses, shipments to consumers are spread out and more costly to deliver.
"If you just looked at overall sales, volumes and what they're getting per package, everything appears just fine," said Logan Purk, an analyst with Edward Jones. "It's the expense side that really offset the more-or-less solid fundamentals."