FedEx Quarterly Profit Drops as Customers Opt for Cheaper, Slower Shipping Alternatives. Shares Drop 11% Premarket.

FedEx reported a sharp decline in quarterly profits and lowered its full-year revenue forecast as customers shifted from faster, expensive deliveries to cheaper alternatives. FedEx CEO Raj Subramaniam cited softer industrial demand as shipments between manufacturers, FedEx’s most profitable segment, declined. Cost cuts from restructuring and merging Ground and Express units failed to offset falling demand. Shares fell nearly 11% in after-hours trading, impacting UPS stock by 2.5%.