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Package delivery giant FedEx Corp. improved net income by 22% to $464 million in its fiscal first quarter as the less-than-truckload unit delivered solid profit growth.

But the corporation also cut its profit forecast by $31.8 million, or 10 cents a share, projecting full-year earnings of $1.99 billion to $2.15 billion because of weakening demand.

While noting that growth was slower than expected, Chief Financial Officer Alan Graf described the economy as “steady as she goes” and “completely different” from 2008, when the U.S. and global economies slipped into recession. He spoke in a Sept. 22 conference call with investors.

FedEx’s Freight unit posted operating income of $42 million for the quarter ended Aug. 31, reversing a $16 million loss the year before, FedEx said in a Sept. 22 statement. It was the second consecutive profit for the Freight unit after six quarters of losses during the recession.

Companywide revenue rose 11% to $10.5 billion, including a 6% increase at Freight to $1.33 billion.

In addition, CEO Frederick Smith said in a statement, “While the economic environment is challenging, we remain confident FedEx will improve earnings, margins and cash flows this fiscal year.” The 2011 fiscal year profit, excluding one-time charges, was $1.55 billion.

“Today’s debate will be whether FedEx’s guidance is ‘encouraging’ or simply ‘optimistic,’ ” UBS in-vestment research analyst Rick Paterson said in a Sept. 22 investor note. “It assumes moderate growth in the global economy, which is increasingly looking like a minority view.”

At the freight unit, FedEx said first-quarter pricing improved 11%, including 6% from higher base rates and 5% from fuel surcharges.

Revenue per 100 pounds of freight jumped to $19.29 in the fiscal first quarter from $17.32 the year before.

Speaking about Freight, Graf also said, “We’re starting to see a lot of productivity improvements and more to come on the combination of networks.”

FedEx combined its less-than-truckload national and regional networks last year, a move that resulted in about $100 million in integration-related costs.

Average daily freight shipments fell 7.4%.

FedEx Freight President Bill Logue said he was pleased with current volume levels that reflect the effect of consolidation of the LTL units.

Volume growth should return in the third quarter, he said, when the effects of the consolidation process no longer influence quarterly results.

FedEx Freight’s operating ratio improved to 96.8 from 101.3.

The ground unit once again posted the highest profit margin growth at the company.

Operating income rose 42% to $407 million from $287 million a year ago, outpacing the 16% revenue increase to $2.28 billion from $1.96 billion.

The ground unit’s operating ratio was 82.1, an improvement of 3.3 percentage points.

Pricing improvements and fuel surcharges boosted ground revenue per package by 9% and volume rose 5%, the Memphis-based company said.

The Express business was hit hardest on the profit front as operating income slipped 19% to $288 million from $357 million. Revenue rose 12% to $6.59 billion.

FedEx’s statement said that the volume declines accelerated during the quarter.

Excess capacity was a factor on the international side.

“We put capacity out anticipating traffic that did not materialize,” Graf said.

Domestically, express package volume fell 3%, but revenue per package was 13% higher because of fuel surcharges, pricing actions and heavier weight per package, FedEx said.

FedEx also announced a rate increase of 3.9% as of Jan. 1 for express shipments. Earlier this month, a 6.75% rate hike was imposed at Freight. New ground rates haven’t been announced yet.

The company also said it plans to repurchase 5.7 million shares, or less than 2% of total shares outstanding.

FedEx ranks No. 2 on Transport Topics Top 100 For-Hire Carriers in the United States and Canada.