* Q1 adjusted EPS seen 85 cents vs 71 cents year ago
* Q1 EPS seen 83 cents vs 53 cents year ago
* Revenues seen up to $12.72 bln from $11.73 bln year ago
By Lynn Adler
NEW YORK, April 26 (Reuters) - United Parcel Service is expected on Tuesday to report higher quarterly profits as an improving economy and higher pricing seem likely to overshadow increasing fuel costs and harsh winter weather.
The economic bellwether's first-quarter operating profit is expected to rise to 83 cents per share from 53 cents a year ago, with revenue increasing to $12.72 billion from $11.73 billion, according to Thomson Reuters I/B/E/S.
Adjusted earnings are expected to rise to 85 cents from 71 cents per share a year ago.
UPS in February forecast record-high profits for this year, saying it controlled costs as compensation and benefit expenses rose less than volume.
Analysts will be looking for indications that oil prices have not risen enough to choke consumer demand and that UPS volume and rate increases can stick.
UPS handles goods equal to 6 percent of the U.S. gross domestic product and 2 percent of global GDP in its trucks and planes, so its shipment trends give a tangible view of consumer demand.
The company in February estimated 2011 profits of $4.12 to $4.35 a share, which would be up more than 15 percent from last year and surpass its prior peak earnings set in 2007.
Wall Street analysts expect, on average, $4.25 earnings per share for the full year on revenue of $53.7 billion, according to Thomson Reuters I/B/E/S.
UPS shares closed 0.6 percent higher on Monday at $73.64, for a 1.5 percent gain year-to-date. That lags the 3.8 percent gain in the Dow Jones Transportation Average in the same period.
Shares of FedEx , the No. 2 package delivery company, closed little changed on Monday at $93.85 and are up 0.9 percent so far this year. (Editing by Bernard Orr and Matt Driskill)