Cyber attack, hurricane weigh on FedEx quarterly profit

Memphis - Package delivery company FedEx Corp on Tuesday reported a lower-than-expected quarterly net profit due to service disruptions from a cyber attack on its Dutch unit, the impact of Hurricane Harvey and higher costs, and also lowered its full-year earnings forecast.

Shares of the company, often considered a bellwether for the US economy as are those of rival United Parcel Service Inc, dipped more than 2% in after-hours trading.

The Memphis-based company reported net income for its fiscal first quarter ended Aug. 31 of US$596 million or US$2.19 per share, down more than 16% from the year-ago US$715 million or US$2.65 per share.

Excluding one-time items, the company reported earnings per share of US$2.51. Wall Street analysts had expected earnings per share of US$3.09.

FedEx lowered its forecast for fiscal 2018 earnings per diluted share to a range of US$11.05 to US$11.85, from a previous range of US$12.45 to US$13.25. Analysts forecast earnings of US$13.01 per share for the full year.

"The impact of the cyber attack on TNT Express and lower-than-expected results at FedEx Ground reduced our first-quarter earnings," said FedEx Corp Chief Financial Officer Alan Graf. "We are currently executing plans to mitigate the full-year impact of these issues."

FedEx said the cyber attack cost 79 cents per share and Hurricane Harvey cost 2 cents per share. – Nampa/Reuters