But now, with the publication of its first quarter earnings FedEx has revealed the cost of falling victim to Petya to be an estimated $300 million in lost earnings. Analysts had expected 15.35 billion.
“FedEx is still a well-oiled machine and there is a lot of value to be had in its shares”, Purk said.
In pre-market NY trading, FedEx shares were 1.4% lower at US$213.00.
In a statement released after-hours on Tuesday, the NYSE-listed firm said it earned US$596mln, or US$2.19 a share in the quarter, down from US$715mln, or US$2.65 a share at the same stage a year earlier.
The cyberattack prompted FedEx to accelerate the process of combining TNT with its Express air-shipping unit, in an effort to reduce exposure to the Dutch business’s legacy technology systems. “As we look ahead to the remainder of FY18, we expect to experience ongoing, but diminishing financial impacts of the cyberattack in the form of lower revenues and higher investments to further improve and strengthen our IT infrastructure”. It is also examining insurance coverage to protect against similar assaults in the future. The same period of past year reportedly had EPS of $2.90 and $14.66 billion in revenue.
“The first quarter due to the TNT Express cyberattack and Hurricane Harvey posed significant challenges to our operation in the first quarter”, Frederick W. Smith, FedEx Corp. chairman and chief executive officer said during the Tuesday Sept. 19 earnings call. TNT primarily serves industrial, automotive, high-tech and health-care industries. Revenue and operating income in the segment were both up, with operating income particularly strong at $176 million, marking a 30 percent increase from the same quarter in FY2017, and the fastest freight growth at FedEx since 2011. The Memphis, Tennessee-based company also reiterated plans for $5.9 billion in capital spending in fiscal 2018. The company will increase its shipping rates by 4.9 percent beginning on January 1, 2018, for its Express, Ground and Freight segments. Shipments to homes are generally less profitable than those to businesses because fewer items are delivered at each stop.
Fiscal first-quarter profit fell to $2.51 a share, compared with analysts’ average expectation of $3.
Global operations outside TNT weren’t affected by the virus, which entered the unit’s systems through tax software used in the Ukraine.
“Our expected 2018 integration expenses are approximately $75 million higher than our previous estimates, as we are accelerating portions of our TNT Express integration given the recent cyber attack”, FedEx said. Companies around the world struggled to retake control of their networks after the intrusions, which cost them hundreds of millions in potential revenue.