FedEx claims NotPetya cyber attack on its Dutch unit will continue to hurt revenue till 2018

Package delivery company FedEx Corp said on 20 September, a June cyber attack on its Dutch unit will continue to hurt revenue through its second fiscal quarter and fiscal full-year 2018 and force bigger investments in information technology.

Representative image. AP Photo

FedEx. AP Photo

FedEx joins a string of companies that reported big drops in earnings because of the NotPetya virus, which hit on June 29, crippling Ukraine businesses before spreading worldwide to shut down shipping ports, factories and corporate offices.

FedEx Corp on Tuesday reported a lower-than-expected quarterly net profit due to the cyber attack, the impact of Hurricane Harvey and higher costs, and also lowered its full-year earnings forecast.

While the Memphis-based company has made progress restoring operations at TNT Express, which it acquired last year for $4.8 billion, its revenues, volumes and profits remain below pre-attack levels, FedEx said. It said it expects ongoing, but diminishing, financial impacts through the remainder of 2018.

FedEx also said in filings its second-quarter 2018 results will be hurt by the integration of TNT Express. It expects integration and restructuring costs over the four years to be roughly $800 million, and expects to incur approximately $350 million of these costs during 2018.

"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.

The company said it was targeting operating income improvement at the FedEx Express segment of $1.2 billion to $1.5 billion in 2020 from 2017 assuming moderate economic growth and other factors.

Published Date: Sep 21, 2017 16:47 PM | Updated Date: Sep 21, 2017 16:47 PM