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

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

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.

FedEx, seen as a global trade barometer, lost over $11 billion in market value. Its earnings report dragged down shares in rivals United Parcel Service and DHL, which are also grappling with sluggish demand and an overhead cost hangover from the early pandemic's ecommerce boom.

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

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