FedEx (FDX 1.37%) late Tuesday reported fiscal first quarter results that came in well ahead of expectations, as a surge in e-commerce business offset pandemic-related expenses. The company is expecting those volumes to sustain through the end of the year, predicting the busiest holiday season in the company's history.

FedEx reported earnings of $4.87 per share on revenue of $19.3 billion, easily topping consensus analyst expectations for $2.69 per share in earnings on sales of $17.6 billion.

A FedEx electric delivery truck on a city street.

Image source: FedEx.

The transportation company saw strong volume growth in international priority shipping, due in part to a fall off in competition as passenger airlines have cut most international flights, as well as U.S. domestic residential packages. Yields improved for FedEx's ground and freight businesses, helped by the introduction of Sunday service.

The added revenue helped offset by higher costs needed to support the demand, as well as COVID-19 safety expenses.

FedEx shareholders endured a miserable 2019 as the company spent heavily to invest in its infrastructure and increase its delivery footprint. In a statement, CEO Fred Smith said that investment is paying off now, saying "our earnings growth underscores the importance of our business initiatives and investments over the last several years, and, in many ways, the world has accelerated to meet our strategies."

Company chief marketing officer Brie Carere on the post-earnings call with investors said FedEx is expected record e-commerce volumes this holiday season.

"We have prepared for what we're calling the shipathon and we are warmed up and we are ready to deliver," Carere said. "As we prepare for a peak like no other, we continue to be very focused on revenue quality while ensuring we are providing our customers with the best service possible during these challenging times."

The company did not provide a forecast for full-year fiscal 2021 earnings due to continued uncertainty, but said it expects annual capital spending of $5.1 billion. Analysts had been expecting $4.9 billion in spending this fiscal year.