FedEx results show impact of cyberattack and Hurricane Harvey
FedEx has reported that its first quarter (Q1) 2018 earnings reflect the negative impact of both the cyberattack that hit TNT Express on 27 June and also Hurricane Harvey, which disrupted operations in the US. In a statement issued yesterday (19 September), Frederick W. Smith, FedEx Corp. chairman and chief executive officer, said: “The first quarter posed significant operational challenges due to the TNT Express cyberattack and Hurricane Harvey, and I want to thank our team members for their extraordinary dedication and performance.
“We are confident of our prospects for long-term profitable growth, and we reaffirm our commitment to improve operating income at the FedEx Express segment by $1.2 billion to $1.5 billion in fiscal 2020 versus fiscal 2017.”
Revenue for Q1 FY 2018 was $15.3bn, up from $14.7bn last year. However, adjusted operating income was down from $1.33bn to $1.24bn and adjusted net income was down from $76om to $683m.
The FedEx Express segment saw its adjusted operating income drop from $652m to $521m.
The company said it is lowering its fiscal 2018 forecast due to the estimated full-year impacts of the TNT Express cyberattack.
Alan B. Graf, FedEx executive vice president and chief financial officer, commented: “The impact of the cyberattack on TNT Express and lower-than-expected results at FedEx Ground reduced our first quarter earnings.
“We are currently executing plans to mitigate the full-year impact of these issues.”
