United Parcel Service Inc.'s (UPS) first-quarter net income fell 56% as the global economic slump sapped shipping volumes and the company opted to retire some aircraft amid soft demand.

UPS, the world's largest package-delivery company, also forecast second-quarter profit below Wall Street's expectations. It said second-quarter domestic package volume will be down 4% to 6%, after falling an average 4.3% in the first quarter.

"The second quarter will be a bit more challenging than the first," Chief Financial Officer Kurt Kuehn told analysts on a post-earnings conference call Thursday.

UPS said it expects second-quarter earnings of 45 cents to 55 cents a share. Analysts polled by Thomson Reuters projected 65 cents.

Still, UPS executives voiced some optimism that the U.S. economy will bottom later this year and then begin a recovery. They said Asian economies appear to be on the same trajectory, although they added that a recovery in Europe could take longer.

As a diversified transportation company that moves everything from documents to building materials, UPS, along with rival FedEx Corp. (FDX), is considered an economic barometer.

UPS shares were down 5.5% at $51.69 in recent trading.

The company posted first-quarter net income of $401 million, or 40 cents a share, down from $906 million, or 87 cents a share, a year earlier.

The results included a write-down related to the retirement of 44 McDonnell Douglas DC-8 aircraft. The company said it was retiring the entire DC-8 fleet earlier than expected because of overcapacity.

Earlier this month, FedEx said it was grounding 14 aircraft for much the same reason.

Excluding items, UPS said it earned 52 cents in the first quarter, the low end of its February forecast. Revenue fell 14% to $10.94 billion. Analysts polled by Thomson Reuters most recently expected $11.44 billion.

Operating margin fell to 6.6% from 11.8%, while consolidated average daily volume - which includes international shipments - slid 3.9% and average revenue per package fell 6.9%. The company said per-package revenue slipped in the quarter because customers opted to reduce package weights to save money, and because of reduced fuel surcharges.

-By Bob Sechler, Dow Jones Newswires; 512-394-0285; bob.sechler@dowjones.com

(Kerry E. Grace contributed to this report)