FedEx reported quarterly earnings that easily beat analysts’ expectations amid increased package delivery volume and  predicted a record holiday-shopping season.

For the second quarter, the company earned $775 million, or $2.84 per share, up from $700 million, or $2.59 per share, a year earlier. Adjusted for one-time items, earnings were $3.18 per share, well above analysts’ expectations of $2.89.

Revenue rose to $16.3 billion in the second quarter from $14.9 billion a year ago though fallout from a June 27 cyberattack on European unit TNT Express and integration expenses associated with the TNT acquisition continued to cut into FedEx’s profits.

“Strategic execution by the FedEx team and a stronger global economy drove improved financial results, and we are well positioned for profitable, long-term growth,” CEO Frederick W. Smith said in a news release.

He added that FedEx was “on track for another record holiday-shipping season.” According to Cowen analyst Helane Becker, domestic and international shipping demand were strong over the Thanksgiving holiday, with online sales up 18% on Black Friday and 17% on Cyber Monday.

“Given the shift to e-commerce we look for continued momentum at [FedEx] Express and Ground,” she wrote in a client note.

FedEx Express revenue increased 8.2% to $9.35 billion while FedEx Ground revenue jumped 12% to $4.93 billion, reflecting a 9% increase in the segment’s average daily package volume and higher base rates.

FedEx’s results also reflect a tax benefit of approximately $80 million from foreign tax credits associated with a dividend paid from foreign operations, and a favorable net impact from fuel, the company said.

“When you look across their operating segments, they showed improvement, if not strength,” Trip Miller, managing partner at Gullane Capital Partners, said.

“We think they could have a lot of potential upside ahead of them based on integrating their TNT acquisition and potentially redeploying capital that will be freed up under the new tax act to reward shareholders, whether that be through buybacks or increased dividends,” he added.

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