United Parcel Service (UPS) Thursday posted a 22 percent increase in quarterly profit on soaring international demand, but its shares fell as some analysts said they were disappointed with the results.

"All of the company's business lines have put in a solid performance," said Bill Kornitzer, a portfolio manager at Buffalo Funds. "But there might be some disappointment that this did not affect the bottom line more."

"(UPS's results) are in line with expectations, but because people were perhaps hoping for a little more I don't expect a lot euphoria," he added.

Investors closely watch the results of Atlanta, Georgia-based UPS and its main rival, FedEx Corp. (FDX), as the package delivery tends to give an indication of the overall health of the U.S. economy.

The world's largest package delivery company said net profit for the quarter totaled $1.05 billion, or 95 cents a share, compared with $866 million, or 76 cents a share, a year earlier.

Earnings per share were reduced by 2 cents from an increase in the company's effective tax rate.

Wall Street analysts had predicted earnings of 96 cents a share. Without the tax increase, earnings would have beaten expectations by a penny a share.

Results for the quarter were boosted in particular by a 22 percent annual rise in UPS' international business.

Fourth-quarter revenue was up almost 22 percent at $11.95 billion, beating analyst predictions of $11.53 billion.

"We would have liked to see a little more leverage on the bottom line," said Andrew Meister, an equity research analyst at Thrivent Investment Management.

The company predicted earnings per share for the first quarter of 2006 of 85 cents to 89 cents. Analysts on average were forecasting earnings per share of 88 cents.

UPS Chief Financial Officer Scott Davis said in a conference call with analysts that with the global economy set for further growth in 2006, the company's international business should continue to increase at a robust rate.

Davis said margins should remain at 2005 levels, with pricing solid as all its competitors have raised rates for 2006.

UPS' U.S. domestic package delivery service revenue rose 8.9 percent on the year to $7.82 billion in the fourth quarter, while international package revenue rose 18.3 percent to $2.22 billion.

"International volumes at UPS continue to grow at a very robust rate," said Rob Siewert, a portfolio manager at Glenmede Trust Co.

Siewert said he takes a long-term view at UPS' business and said that global economic growth prospects for the next five years show great promise for the package delivery company.

"Of all the big shippers I think UPS is the best positioned to take advantage of that global economic growth," he said.

UPS has been trading at 22 times its projected 2006 earnings, compared with the average of 17 times for the stocks listed on the Dow Transportation Average. The company's stock has risen by nearly 10 percent since mid-July last year, compared with almost 17 percent growth seen by the Dow Transportation Average.