FedEx Corp issued a stronger than expected full year forecast as it announced that quarterly earnings had risen. The rise was attributed to adopting a selective policy on which shipments it would deliver. Investors were impressed that performance was improving, even despite softer global demand for shipping.

Shares rose 2% to $232.75. The closely watched ground unit, which handles the bulk of the company’s ecommerce shipping and which drives the company’s growth, saw its margin improved from last quarter. It has however failed to perform as well as rival UPS, whose new CEO chose a strategy of quantity over quality two years ago.

New FedEx Chief Executive Raj Subramaniam, who succeeded the firm’s founder, Fred Smith on June 1, has been pressured by investors to improve the service and increase profits from the Ground, Express, and Freight segments.

Margins in Ground went from 7.3% in the third quarter to 10%, after fuel surcharges were increased, unattractive shipments were declined, and labor costs began to stabilize. Per package revenues were up 11%.

Subramaniam said that elevated Ground rates were not a problem because, “We are essentially critical infrastructure for e-commerce.”

Fourth quarter adjusted net income was up 32% from a year earlier, to $1.8 billion or 6.87 per share. Revenue was up 8% to $24.4 billion.

Analysts estimates of per share earnings were beaten by one penny, while revenue was just off the analysts’ prediction of $24.56 billion.

Full year earnings per share were forecasted at $22.50 to $24.50 excluding items. That beat the analysts’ average estimate of $22.14 per share.

FedEx’s board was expanded last week, under an agreement with activist investor D.E. Shaw group, which holds a 1% stake in the company.