FedEx Corp. (NYSE: FDX) reported Wednesday that its net profit rose in its second fiscal quarter for 2006 but fell short of Wall Street expectations.

The Memphis, Tenn.-based package deliverer reported a net income of $511 million for the quarter, up from $471 million during the same period last year. The firm earned $1.64 per share, which was below Wall Street expectations of $1.76 per share, according a poll of analysts by Thomson Financial.

The company said that the cost of a new $143 million labor contract with pilots totaled 25 cents per share. Excluding the costs, the company earned $1.89 per share. The company said the costs more than offset the benefits from revenue growth, declining fuel prices and revenue management actions.

The company expected its third quarter earnings to range from $1.20 to $1.35 per share, below Wall Street estimates of $1.54 per share.

Fed Ex’s shares decreased $2.14, or 1.88 percent to $111.86 in morning trading on the New York Stock Exchange.