Deutsche Post DHL posted consensus-beating quarterly earnings and affirmed its 2011 outlook as demand from Asia boosted profits at its express delivery business.

Asia is still growing faster than Europe and the United States, and we expect it to remain that way in the foreseeable future, finance chief Larry Rosen told reporters during a conference call after Deutsche Post published results on Tuesday.

In recent years, Deutsche Post has invested in expanding its express delivery hub in Hong Kong, setting up another hub in Shanghai and growing the fleet of Air Hong Kong, its air freight joint venture with Cathay Pacific <0293.HK>.

Asia-Pacific, its fastest-growing market, contributed nearly 14 percent to group revenue in the first quarter, and Rosen said he expects the proportion of sales generated in growth markets, about a third now, to continue to expand.

China and India are the two focal points of our growth strategy in Asia, Rosen said.

And we are taking exactly the same approach in other growth markets like Latin America and Africa.

Deutsche Post's first-quarter earnings before interest and tax (EBIT) rose 11 percent to 629 million euros, beating expectations.

Shares in Deutsche Post rose 2 percent to 13.756 euros by 0828 GMT, making it one of the biggest gainers on Germany's blue-chip DAX index <.GDAXI>.

The stock has hovered between 12 euros and 14 euros for the past year -- half as much as in 2007 -- as Rosen's conservative financial strategy failed to impress investors waiting for a payout after Deutsche Post divested or shut down several businesses.


Deutsche Post said it still expects its 2011 EBIT to grow to between 2.2 billion and 2.4 billion euros this year after coming in at 1.8 billion in 2010, bolstered by global economic growth. Analysts on average see EBIT of just below 2.4 billion euros.

Growth is a bit stronger than we had expected, despite some problems such as natural catastrophes, Rosen told Reuters Insider TV, adding Deutsche Post's outlook for the global economy was good for coming quarters.

As the economy improves, companies spend more on shipping goods via Deutsche Post's express delivery and freight businesses, pushing up rates especially in fast-growing markets such as Latin America, the Middle East and Asia.

Deutsche Post, Europe's biggest express delivery and mail company, raised prices for express delivery in Asia Pacific, the Middle East and Africa this year, and Rosen said the company would continue to pass on rising fuel costs to customers.

The company echoed recent comments by U.S. rivals United Parcel Service and FedEx , which have been banking on price increases and cost cuts to help offset a spike in fuel prices.

(Additional reporting by Eva Kuehnen; Editing by Mike Nesbit)