FedEx in ChinaMarket watchers looking for clues about the health of the global economic recovery will key on FedEx (FDX) when it reports quarterly earnings before Wednesday's opening bell.

As the world's second-largest shipping company after UPS (UPS), FedEx is a barometer of global demand. And since its business is skewed more toward Asia than its larger rival, FedEx is especially attuned to conditions in China, which is now leading the global recovery.

FedEx is expected to report fiscal-fourth quarter earnings of $1.32 a share, according to data from Thomson Reuters, more than double the 64 cents a share booked in the prior-year period and at the higher end of management's guidance of $1.17 to $1.37 a share. Revenue estimates, on average, show growth of 15% to $9.04 billion from $7.85 billion a year ago, according to Thomson Reuters data.

One-Quarter of Revenue From International Shipments

In May, exports out of China leaped nearly 49% year-over-year after growing more than 30% on the same basis in April. FedEx recently began domestic express delivery to more than 200 Chinese cities and domestic overnight delivery to most of Mexico, notes Morningstar analyst Keith Schoonmaker.

"FedEx now derives one-fourth of its revenue from international shipments, some of which is high-margin international priority packages," Schoonmaker told clients in a recent report.

Any weakness in Europe has likely already been baked in to expectations -- and the Contintent's financial crisis is more of a UPS problem, anyway, wrote Avondale Partners analyst Donald Broughton.

"FedEx's international business is more oriented toward trans-Pacific and Asia, while UPS is more exposed to trans-Atlantic and European issues," Broughton told clients Friday. "While FedEx does have some exposure to Europe, it is not nearly as impacted by potential European problems as UPS."

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