The second-top parcel delivery company in the world, FedEx, today upped earnings projections for the current fiscal quarter and for full year earnings.

The company’s Chief Financial Officer (CFO), Alan Graf, made the announcement early today in a written statement.

Mr. Graf said the increase in earnings projections were a direct result of better-than-anticipated volume growth with Express and Ground shipments.

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FedEx has lowered its expectations for 2009 as company CEO Fred Smith said FedEx is experiencing some of the worst economic conditions in the company’s history. Right now, FedEx has a hiring freeze in place, and has stopped 401(k) contributions for one year. Upper management will also get a 10% pay decrease starting in January and CEO Fred Smith will see a 20% decrease in his salary. I also firstly reported on Dec 9 that FedEx already decreased expectations for 09 and increased its rates to offset costs. The FedEx stock is up over 1% as FedEx met Q4 08 expectations with a higher net profit as costs were offset by lower fuel costs. Interestingly, crude is now trading at $38.5 a barrel as shown on the sidebar.

FedEx has just announced it will cut costs and increase shipping rates for 2009 (3% average net increase, 3.8% net increase for FedEx Ground) because of the economic crisis. The company has lowered its fiscal 08 expected profits to be between $3.50-$4.75 earnings per share, down from $4.75-$5.25 a share. The new forecast is significantly lower than Wall Street forecasts, who expected the company to earn about $5.16 a share.

In other news, FedEx competitor, Con-way, has too lowered its 2008 forecast to earnings of $2.20-$2.35 a share, down from $2.60-$2.80 per share earlier in the year. Con-Way also recently cut its payroll costs by up to $40 million for 2008 by reducing its workforce by 8%, or 1,450 employees, across North America.

No additional job cuts were announced, from either FedEx or Con-Way.