FedEx Corporation: Q1 Earnings Plunge After a Cyberattack

Three months ago, package delivery giant FedEx (NYSE: FDX) posted excellent fourth-quarter results, soaring well past analysts' expectations. At the time, FedEx's management was very optimistic about the 2018 fiscal year. As CFO Alan Graf noted, the company's outlook for the new fiscal year called for strong earnings growth.

However, the very next week, a ransomware cyberattack devastated the IT systems at FedEx's recently acquired TNT Express subsidiary. This attack caused FedEx's earnings to plunge last quarter -- and could continue to have negative impacts in the second quarter and beyond.

For the first quarter of fiscal 2018, FedEx reported earnings per share of $2.19 and adjusted EPS of $2.51. For comparison, EPS was $2.65 and adjusted EPS was $2.82 in the year-earlier period. (The main adjustments in both quarters related to TNT Express integration expenses.) By either measure, FedEx's earnings declined by double digits on a year-over-year basis. Prior to the cyberattack in June, analysts had expected FedEx to post adjusted EPS of $3.19 in Q1.

Continue reading

Source: Fool.com