On Thursday, the Chief Executive Officer of FedEx, Raj Subramaniam, expressed his belief to Jim Cramer of CNBC that a recession is on the horizon for the world economy.
“I think so. But you know, these numbers, they don’t portend very well,” Subramaniam said in response to Cramer’s question about whether the economy is “going into a worldwide recession.”
The pessimism of the CEO was a direct result of FedEx missing projections for both sales and profitability in the company’s first quarter. Additionally, the business removed its guidance for the whole year. During Thursday’s extended trading session, the price of a share of FedEx decreased by 15%.
“I’m very disappointed in the results that we just announced here, and you know, the headline really is the macro situation that we’re facing,” Subramaniam said tonight in an interview on CNBC’s Mad Money.
FedEx’s top executive, who took over the role at the beginning of this year, said that declining worldwide cargo volumes were the primary factor in the company’s unsatisfactory performance.
According to what he claimed, while the business had expected that demand would grow once facilities in China that had been closed due to Covid came back up, demand actually decreased instead.
“Week over week over week, that came down,” Subramaniam said.
The CEO says the reduction in volume is far-reaching, and that the firm has been seeing weekly losses since about the time of their investors day in June, CNBC reports.
“We’re seeing that volume decline in every segment around the world, and so you know, we’ve just started our second quarter,” he said. “The weekly numbers are not looking so good, so we just assume at this point that the economic conditions are not really good.”
“We are a reflection of everybody else’s business, especially the high-value economy in the world,” he later added.
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