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 said in response to Cramer’s inquiry about whether or not the economy is “going into a worldwide recession.”
After FedEx underperformed expectations for revenue and earnings in the first quarter, the CEO’s pessimism was warranted. The corporation also revoked its forecast for the entire year.
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,” in a “Mad Money” interview, Subramaniam said.
The chief executive, who took over the role earlier this year, claimed that FedEx’s underwhelming performance were caused by declining global shipment volumes. According to him, despite the company’s expectations, demand decreased after Covid-related factory closures in China.
“Week over week over week, that came down,” Subramaniam said.
The company has had weekly reductions since about its investor day in June, according to the chief executive, who also noted that the volume loss is significant.
“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.