After FedEx failed expectations for revenue and earnings in its first quarter, the CEO became pessimistic. Additionally, the business revoked its full-year guidance. The FedEx CEO has predicted a worldwide recession.
Raj Subramaniam, the CEO of FedEx, told Jim Cramer on CNBC on Thursday that he thinks the world economy is headed for a recession.
“I think so. But you know, these numbers, they don’t portend very well ,” Subramaniam remarked in response to Cramer’s inquiry about whether the economy is “going into a worldwide recession.”
FedEx missed projections for revenue and earnings in its first quarter, which led to the CEO’s pessimism. Additionally, the business revoked its full-year guidance.
On Thursday, shares of FedEx fell 15% during extended trading.
“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 in an interview on “Mad Money.”
The chief executive, who took over the role earlier this year, claimed that FedEx’s underwhelming performance were caused by declining global shipment volumes. While the business expected demand to rise after factories closed due to Covid reopened, it actually declined, he added.
“Week over week over week, that came down,” Subramaniam said.
The CEO also stated that the volume loss is widespread, and that the company has observed weekly losses since around its investor day in June.
“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.