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,

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 company also lowered its financial outlook for the fiscal year ahead, projecting earnings per share between $20 and $21 versus its prior range of $20 to $22. That sent shares tumbling nearly 15%.

FedEx reported a lower first-quarter profit on Thursday as demand in the package industry remained muted, especially for priority services.

Analysts sees a potential spinoff of FedEx’s freight business as a possible boost, but the stock is dropping sharply

FedEx has lowered its full-year outlook, expecting low-single-digit-percent revenue growth year over year, down from its previous projection of a low-to-mid-single-digit increase. It expects earnings per diluted share to range from $17.90 to $18.90, compared to the earlier forecast of $18.25 to $20.25.

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

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

Key Takeaways FedEx lowered its revenue and earnings outlook for fiscal 2025.The company's fiscal first-quarter results missed analysts' expectations on the top and bottom lines amid weaker demand for its priority shipping services.