FedEx Corp forecast

profit for the current quarter below analysts' expectations, casting doubt on the sustainability of its holiday volume surge and sending the package delivery giant's shares down more than 5 percent.

The company, an economic bellwether, said it shipped 14.1 million packages on Monday, its busiest day of the year, which was a million more than it had forecast.

But its results will be hurt by post-holiday seasonal slowness in January and February, Chief Financial Officer Alan Graf Jr said during a conference call with analysts. FedEx sees continued recovery in the economy, but characterized it as modest.

Investors had hoped that FedEx' raising of its guidance in early December for its fiscal second quarter meant a more thoroughgoing economic recovery than the company described in its results on Thursday, said Edward Jones analyst Dan Ortwerth.

The market had decided this meant the economy was going gangbusters. Then out comes the details. The economy is improving but it's still on shaky ground. So the stock is back to where it was before the pre-announcement, Ortwerth said. It's almost comical. The price goes up, the price goes down.

FedEx' shares were off 5.3 percent at $85.17 in morning trading while rival United Parcel Service Inc's shares were also down, about 1.8 percent at $57.97.

Every year, FedEx ships 4 percent of the nation's gross domestic product; UPS 6 percent. They handle such a huge chunk of U.S. shipping economists consider them bellwethers.

The Memphis-based shipper forecast earnings for the current quarter of 50 cents to 70 cents a share, well below analysts' average estimate of 84 cents, according to Thomson Reuters I/B/E/S.

But the company forecast profit for the full fiscal year of $3.45 to $3.75 per share, better than analysts' forecast of $3.46.

It also reported profit of $1.10 per share for the second quarter ended Nov 30, in line with its raised guidance announcement earlier this month, on volume growth driven by economic momentum.

FedEx' shares have been on a tear this year, more than doubling from their low at $34.02, set in March.

UPS'shares are up by about half from their March low.

(Reporting by Helen Chernikoff; editing by John Wallace, Dave Zimmerman)