FedEx Profit Takes $300 Million Hit After Malware Attack

The malware attack that hit international delivery services company TNT Express in June had a negative impact of roughly $300 million on FedEx’s profit in the latest quarter.

TNT Express, which FedEx acquired last year for $4.8 billion, was one of several major companies whose systems were infected with NotPetya malware (also known as Nyetya, PetrWrap, exPetr, GoldenEye, and Diskcoder.C) in late June.

The company reported a few weeks after the attack that the incident had a significant impact on its operations and communications. FedEx admitted at the time that it was possible TNT would not be able to fully restore all affected systems and recover all the critical business data encrypted by NotPetya.

“The worldwide operations of TNT Express were significantly affected during the first quarter by the June 27 NotPetya cyberattack. Most TNT Express services resumed during the quarter and substantially all TNT Express critical operational systems have been restored. However, TNT Express volume, revenue and profit still remain below previous levels,” the company said on Tuesday.

“Operating results declined due to an estimated $300 million impact from the cyberattack, which was partially offset by the benefits from revenue growth, lower incentive compensation accruals and ongoing cost management initiatives,” it added.

Hurricane Harvey, a category 4 hurricane that hit Texas in late August, also had a negative impact on the company’s earnings in the latest quarter.

FedEx reported earnings of $2.19 per diluted share compared to $2.65 per diluted share one year ago. The company reported a revenue of $15.3 billion and reaffirmed its commitment to improve the operating income of its largest business, FedEx Express, by $1.2 billion to $1.5 billion by 2020 compared to fiscal 2017.

FedEx is not the only company whose bottom line was impacted by NotPetya, a piece of malware that initially appeared to be ransomware and later turned out to be a wiper.

Financial reports published in August by Danish shipping giant AP Moller-Maersk, British consumer goods company Reckitt Benckiser, voice and language solutions provider Nuance Communications, Mondelez International, and French construction giant Saint-Gobain reported losses of millions of dollars due to the cyberattack. The highest sum was announced at the time by Saint Gobain, which expected losses to rise to nearly $400 million.

Related: Industry Reactions to Destructive NotPetya Attacks