FedEx CEO Raj Subramaniam reviewed the shipping company’s quarter in a Thursday interview with CNBC’s Jim Cramer, emphasizing strength in business-to-business transactions.
“FedEx is the heartbeat of the industrial economy — that’s the global network that we have put in place,” Subramaniam said. “Our focus is always on differentiation and providing new value for our customers.”
“So we are winning in key verticals,” he continued, “Whether it’s healthcare, whether it’s aerospace, whether it’s defense, and now the newly-minted data center, you know, and the AI investments.”
FedEx beat on the top and bottom lines when it posted its quarterly report Thursday after close. Management also raised the low end of its full-year forecast for both earnings and revenue. Shares jumped over 2% in extended trading.
Subramaniam described how FedEx is benefiting from the data center boom, saying its customers who invest billions in artificial intelligence technology need to move parts within the countries and across national borders. FedEx’s global network positions it well to support large corporations, he suggested. He indicated that the business-to-business arm is growing, saying 66% of FedEx’s revenue comes from that segment.
International supply chain and trade patterns are changing, Subramaniam suggested, saying the world is in the middle of a transition, “going from one equilibrium state that has been in place for 30 years or so to another.” He said FedEx “flexed down our capacity” as trade between the U.S. and China has declined over the last sixth months.
However, he indicated that business is picking up elsewhere.
“China’s trade surplus is actually up, meaning that there’s more traffic going to other parts of the world,” Subramaniam said. “So our intra-Asia traffic is up, our Asia to Europe — which is primarily B2B, actually — is up. And Latin America inbound is up, Asia to the Middle East and India is up, India outbound is up.”
