FedEx Corp. (FDX) said fiscal first-quarter earnings will exceed its previously dour expectations and projected a profit this quarter largely above analysts' estimates as the company benefits from improvement internationally and cost controls.

Shares rose 4.8% premarket to $76.11.

The company has been pressured during the recession as shipping volumes have fallen, more than offsetting benefits from falling fuel costs. FedEx - considered an economic bellwether - in June projected earnings of 30 cents to 45 cents, far below analysts' then-average estimate of 68 cents.

But the company said Friday that earnings should come in at 58 cents when it fiscal first-quarter results on Wednesday. In part, Chief Financial Officer Alan B. Graf credited better-than-expected volume in FedEx's international priority-delivery service.

He added that despite "encouraging signs" in the global economy, "it is difficult to predict the timing and pace of any economic recovery."

Still, FedEx projected earnings for the current quarter of 65 cents to 95 cents. Analysts were predicting 70 cents.

In the first quarter, revenue per shipment declined across the company amid lower fuel surcharges. Graf added, "We continue to face a very competitive pricing environment combined with significant overcapacity" in the less-than-truckload freight market.

Separately, FedEx disclosed an Internal Revenue Service audit team plans to assess taxes and penalties of $14 million related to employment and withholding taxes in 2002. The company plans to "contest the erroneous conclusions' in the audit.

It added the IRS is looking at similar issues for 2004 through 2008.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com