By Shivansh Tiwary and Lisa Baertlein (Reuters) -Shares of FedEx slumped almost 16% on Friday, the worst in two years, after a dismal first-quarter profit drop due to anemic economic conditions and an ongoing customer shift toward slower,

The little good news was that cost-cutting measures FedEx has achieved helped offset the revenue and expense pressure.

(Reuters) - FedEx Corp shares slumped on Friday after the parcel giant cut its annual revenue forecast and reported a sharp fall in profits, owing to weak demand for high-margin speedy delivery services. Shares of the company were down nearly 13% in premarket trading, with rival UPS down 2.4%.

FedEx said a weaker industrial economy produced a “challenging” quarter that caused it to trim its outlook for later this year, a sign of possible cooling in the wider economy.

The package-delivery giant said reduced demand for priority services and higher operating costs weighed on its results.

FedEx reported a drop in first-quarter profit on Thursday and lowered the top end of its annual profit forecast as demand in the package industry remained muted, especially for priority services. The company's shares fell about 11% to $268.

FedEx’s results were dragged down by weaker-than-expected demand, particularly in the U.S. domestic package market.

FedEx came up short on top and bottom lines, and guidance revisions suggest there is more bad news to come in fiscal 2025.