(Fox Business News)-FedEx Corp. said Tuesday that a cyber attack earlier this year dented earnings in its first quarter by roughly a third, prompting the package delivery giant to cut its profit forecast for the rest of the fiscal year.
The company said that the June 27 cyber attack, which security experts dubbed Petya, dragged on per-share earnings by 79 cents, lowering its quarterly profit to $2.19 a share.
FedEx has said the hacked affected operations of its TNT Express business, which has delivery operations in the Middle East and Africa, Asia-Pacific, Europe, and South America. The worldwide operations of the business were “significantly affected” during the fiscal first quarter ended Aug. 31, FedEx said. And while most disrupted services have resumed with critical systems restored, the company said TNT Express’ volume, revenue and profit remain below previous levels.
The impact of the cyber attack on TNT Express and lower-than-expected results at FedEx Ground reduced our first-quarter earnings,” said Alan B. Graf Jr., FedEx’s chief financial officer. “We are currently executing plans to mitigate the full-year impact of these issues.” Hurricane Harvey also hurt earnings by 2 cents a share in the first quarter, FedEx said.
“This was not an ordinary cyberattack,” FedEx’s chief information officer, Robert Carter, said during a conference call with analysts. The company said it now expects annual earnings stripped of certain items to be between $12 and $12.80, down from its previous estimate of between $13.20 and $14.
FedEx acquired TNT Express last year for $4.8 billion, the largest acquisition in FedEx’s history as part of a move to accelerate its growth abroad. The Dutch company contributed 12% to FedEx’s top line in the prior fiscal year.
On Monday, FedEx said it would raise shipping rates beginning Jan. 1. The shipping company said FedEx Freight, Express, Ground and Home Delivery shipping rates in the U.S. would increase by an average of 4.9%.
