(Reuters) -FedEx ( FDX ) 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 $268.21 after the bell.

FedEx ( FDX ) and other transportation firms expanded operations during the pandemic-fueled online shipping boom. After demand normalized, package delivery firms have been laying off workers, shuttering offices and sorting facilities, and parking trucks and planes to shelter margins from excess overhead costs.

The company did away with $1.8 billion in structural costs in fiscal 2024 ended May, and plans to take out another $2.2 billion in costs in fiscal 2025.

However, ongoing cost cuts failed to offset the drag from weak demand for the lucrative priority services in the United States and one fewer operating day in the quarter, FedEx ( FDX ) said.

The company now expects adjusted operating income for fiscal 2025 to be in the range of $20 to $21 per share, compared with its prior forecast of $20 to $22 per share.

FedEx ( FDX ) reported first-quarter earnings of $3.60 per share, compared with $4.55 per share a year earlier.