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FedEx Earnings Down 17% Due to Cyber Attack and Harvey

| September 20, 2017

Cyber Attack

FedEx Corp reported earnings of $2.19 per diluted share ($2.51 per diluted share on an adjusted basis) for the first quarter ended August 31, compared to earnings of $2.65 per diluted share ($2.82 per diluted share on an adjusted basis) a year ago — down approximately 174%.¬†

According to FedEx, both as-reported and adjusted earnings reflect the estimated negative impact of the June 27 cyber attack affecting TNT Express ($0.79 per diluted share) and Hurricane Harvey ($0.02 per diluted share).

The company further noted: “Financial results during the quarter benefited from higher base rates at each of our transportation segments, which was more than offset by reduced revenue and increased expenses resulting from the TNT Express cyber attack, TNT Express integration expenses, higher costs at FedEx Ground, a higher tax rate, and the impact from Hurricane Harvey. Results also benefited from lower incentive compensation accruals.”

The worldwide operations of TNT Express were significantly affected during the first quarter by the June 27 NotPetya cyber attack. Most TNT Express services resumed during the quarter and substantially all TNT Express critical operational systems have been restored. However, TNT Express volume, revenue and profit still remain below previous levels.

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Category: Featured, Management, News

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