United Parcel Service Inc , the world's largest package delivery company, has become more cautious heading into one of its busiest periods -- the U.S. holiday shopping season.

November and December are a peak period for UPS and its main rival, FedEx Corp as they carry large volumes of packages ordered by consumers, as well as shipments for retailers who sometimes need to quickly restock shelves.

"We are slightly more cautious about Q4 than we were perhaps three or four months ago, but we do still see a positive holiday season and we do expect consumers to show up for Christmas," Chief Financial Officer Kurt Kuehn said in an interview.

It is also a critical time for major retailers, from Wal-Mart Stores Inc to Amazon.com Inc

"The real concern is what the global economy does. Their results today showed that the U.S. economy is doing OK while the growth engine in Asia and global trade in general is still pretty strong," said Matt Collins, an analyst at Edward Jones in St. Louis, who covers the company. "The holiday season will be a big wild card for UPS."

BB&T Capital Markets analyst Kevin Sterling said every day UPS moves "about 7 percent of U.S. GDP. If they say they expect modest holiday season growth, they probably know better than anyone else."

Despite the cautious tone, UPS raised its full-year profit forecast. It now looks for full-year profit of $3.48 per share to $3.54 per share, up from a prior forecast of $3.35 to $3.45.

FedEx last month raised its profit forecast for its 2011 fiscal year, which runs through May, and also warned that it saw slowing growth in the coming months. (Reuters)