FedEx Suffers $300 Million Profit Loss Pursuant to NotPetya Malware Attack

FedEx-owned international delivery services company TNT Express was hit by a malware attack back in June. The aftermath from this event is now clear. FedEx announced that the damage inflicted has cost the company an estimated $300 million in profit in the latest fiscal quarter.

TNT Express was acquired by FedEx last year for a sum of $4.8 billion. The company was one of a number of entities to be hit by a massive malware attack in late June. The virus behind the attack is known by a few names, including NotPetya, PetrWrap, exPetr, Nyetya, GoldenEye, and Diskcoder.C.

Several weeks after suffering the attack, FedEx issued a statement to address the event. The company revealed that the incident has had a significant impact on both its operations and its communications. The statement disclosed details about the aftermath, as FedEx admitted that the encrypted data cannot be fully recovered. TNT Express would lose a significant amount of business records as a result.

The official statement was published this Tuesday. “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,” FedEx said.

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,” the company added.

Further losses were accumulated after Hurricane Harvey, a category 4 hurricane, hit the state of Texas in late August. The natural disaster would also have a negative effect on the latest quarter earnings.

FedEx reported earnings of $2.19 per diluted share which is a step down from the $2.65 per diluted share value from a year ago. Despite the setbacks, the company has accumulated a revenue of $15.3 billion in the past fiscal year which is an improvement from last year. Management reaffirmed its commitment to improve the operating income of its largest business, FedEx Express. The goal is to raise the marginal income by $1.2 billion to $1.5 billion by 2020 compared to fiscal 2017.

FedEx was not the only entity to be targeted in the June 27 attack. The deceitful NotPetya wreaked havoc on many fronts. The virus caught a lot of people off guard and managed to confuse malware experts. Initially thought to be ransomware, the virus was later found to be a wiper.

Financial reports from August revealed the degree of the impact on the affected enterprises. Danish shipping giant AP Moller-Maersk, British consumer goods company Reckitt Benckiser, voice and language provider Nuance Communications, multinational food and beverage producer Mondelez International, and French construction giant Saint-Gobain all registered losses of millions of dollars. Saint-Gobain suffered the biggest blow as a result of the malware attack, with nearly $400 million in losses.

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