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- 20 September 2022
- Transport / Logistics Services
FedEx Corp has reported lower than expected first quarter financial results.
According to FedEx, the profit drop in the FedEx Express segment was down to a ‘macroeconomic weakness’ in Asia and service ‘challenges’ in Europe. This led to a revenue shortfall of $500m relative to previous company forecasts. Essentially, revenues and profits remained even between first quarter of the year ending 2022 and Q1, 2023 when the company expected considerable growth.
In the face of what the CEO Raj Subramaniam fears will be a global economic recession, FedEx has been taking measures to cut costs. Even so this cost cutting lags behind volume drops and as a result operating expenses remained high relative to demand.“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S. We are swiftly addressing these headwinds, but given the speed at which conditions shifted, first quarter results are below our expectations,” said Raj Subramaniam, FedEx Corporation president and chief executive officer.
Subramaniam concluded, “While this performance is disappointing, we are aggressively accelerating cost reduction efforts and evaluating additional measures to enhance productivity, reduce variable costs, and implement structural cost-reduction initiatives. These efforts are aligned with the strategy we outlined in June, and I remain confident in achieving our fiscal year 2025 financial targets.”
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