Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Earnings Watch: FedEx Profit Falls Due to Cyberattack, Hurricane Harvey

FedEx earnings during its fiscal 2018 first quarter fell 17% from a year ago as a result of a cyberattack and Hurricane Harvey, despite a slight improvement in revenue.

Evan Lockridge
Evan LockridgeFormer Business Contributing Editor
September 19, 2017
Earnings Watch: FedEx Profit Falls Due to Cyberattack, Hurricane Harvey

 

3 min to read


FedEx Corp. on Tuesday afternoon reported its earnings during its fiscal 2018 first quarter fell 17% from a year ago as a result of a cyberattack and Hurricane Harvey, despite a slight improvement in revenue, and it's planning higher shipping rates.

Ad Loading...

The Tennessee-based parcel delivery and trucking company reported net income of $596 million, or $2.19 per share, for the three months ending Aug. 31, compared to net income of $715 million, or $2.65 per share, during the same time in 2016.

Ad Loading...

Total revenue in the most recent quarter increased 4% from a year earlier to nearly $15.3 billion.

According to the company, the results benefited from higher base rates at each of its transportation segments. However, they were offset by reduced revenue and increased expenses resulting from the TNT Express cyberattack, TNT Express integration expenses, higher costs at FedEx Ground, a higher tax rate, and the effects from Hurricane Harvey.

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, according to FedEx.

For the first quarter, FedEx Freight, the company’s trucking segment, reported revenue increased 6% to $1.75 billion while operating income improved 30% to $176 million.

Revenue increased primarily due to higher base rates, increased weight per shipment and higher fuel surcharges, according to FedEx. Average daily less-than-truckload (LTL) shipments grew 1%. Operating results improved primarily due to higher LTL revenue per shipment.

Ad Loading...

The FedEx Express segment, which includes TNT Express, saw revenue increase 2.2% to $8.65 billion, but operating income fell 29% to $433 million.

The company reported revenue grew primarily due to higher U.S. domestic package base rates and strong international package growth, which was partially offset by the impact from the TNT Express cyberattack.

Operating results declined due to an estimated $300 million impact from the cyberattack. This was partially offset by the benefits from revenue growth, lower incentive compensation accruals, and ongoing cost management initiatives. The results include $88 million of TNT Express integration expenses.

Meantime, FedEx Ground saw revenue increase 8% to $4.64 billion, while operating income moved 3% higher to $626 million. Revenue increased primarily due to average daily package volume growth of 4% and higher commercial service base rates, according to FedEx.

FedEx also announced that beginning the first of 2018, FedEx Express, FedEx Ground and FedEx Freight will increase shipping rates by an average of 4.9%. Effective Jan. 22, 2018, dimensional weight pricing will apply to FedEx SmartPost shipments. Details related to these and additional changes to rates and surcharges are available on the FedEx website.

Ad Loading...

Looking ahead to the end of the current fiscal year, FedEx said it is unable to provide earnings guidance due to pension accounting adjustments. However, it lowered its fiscal 2018 forecast due to the estimated full-year impacts of the TNT Express cyberattack.

“The impact of the cyberattack on TNT Express and lower-than-expected results at FedEx Ground reduced our first quarter earnings,” said Alan B. Graf Jr., FedEx Corp. executive vice president and chief financial officer. “We are currently executing plans to mitigate the full-year impact of these issues.”


More Fleet Management

ATA President Chris Spear.
Fleet Managementby Jack RobertsMarch 17, 2026

ATA’s Spear Warns Fuel Prices, Trade Policy, and Global Conflict Could Stall Trucking Recovery

Speaking at the TMC Annual Meeting in Nashville, ATA President Chris Spear said trucking faces mounting pressure from rising fuel prices, geopolitical instability, and uncertainty around trade policy.

Read More →
Illustration of author headshot with black-and-white old-fashioned rig in the background

New Entrants, Chameleon Carriers, and Safety: Is It Too Easy to Start a Trucking Company?

More than 100,000 new trucking companies enter the industry each year, but regulators manage to audit only a fraction of them. That churn creates opportunities for inexperienced startups — and for “chameleon carriers” that shut down after safety violations and reappear under new identities. Read more from Deborah Lockridge in this commentary.

Read More →
Panel discussion
Fleet Managementby Deborah LockridgeMarch 12, 2026

Fleet Managers Invited to Apply for Exclusive HDT Exchange Event

HDTX is an intimate event that connects heavy-duty trucking fleet managers with industry suppliers through small-group discussions, educational sessions, and structured one-on-one meetings.

Read More →
Ad Loading...
DAT iPhone Widget.
Fleet Managementby News/Media ReleaseMarch 12, 2026

DAT Launches iPhone Widget to Help Owner-Operators Find Loads Faster

New DAT One feature shows top-paying loads directly on an iPhone’s home screen, helping carriers react faster to spot-market opportunities.

Read More →
Optimal Dynamics Scale screen shot
Fleet Managementby News/Media ReleaseMarch 12, 2026

Optimal Dynamics Launches AI System to Help Carriers Choose Better Freight

Optimal Dynamics says its new Scale platform uses AI agents and optimization to help carriers find and secure freight that improves network balance and profitability.

Read More →
DAT March 2026 trucking conditions.
Fleet Managementby Jack RobertsMarch 12, 2026

DAT: Flatbed Demand Climbs as Van and Reefer Rates Soften

DAT Freight & Analytics data shows tightening flatbed capacity, easing produce markets, and softening van and reefer rates.

Read More →
Ad Loading...
YouTube thumbnail with Mike Roeth of NACFE saying "NACFE's Messy Middle: Which Fuel Wins?"
Fuel Smartsby Deborah LockridgeMarch 11, 2026

Run on Less “Messy Middle” Data Shows Multiple Paths Forward for Truck Powertrains [Watch]

NACFE's Run on Less - Messy Middle project demonstrates the power of data in helping to guide the future of alternative fuels and powertrains for heavy-duty trucks.

Read More →
Illustration of crowded New York street overlaid with dollar signs
Fleet Managementby Deborah LockridgeMarch 11, 2026

Federal Court Lets NYC Congestion Pricing Continue

A federal court ruling allows New York City’s congestion pricing program to continue, leaving truck tolls in place for fleets delivering into Manhattan.

Read More →
Fontaine Modification Access365
Fleet Managementby News/Media ReleaseMarch 10, 2026

Fontaine Modification Launches Real-Time Truck Modification Tracking Portal

Fontaine Modification has introduced a new customer portal designed to give fleets real-time visibility into the truck modification process, addressing one of the most common questions fleet managers face: “Where’s my truck?”

Read More →
Ad Loading...
FTR Tucking Conditions March 2026.
Fleet Managementby Jack RobertsMarch 10, 2026

FTR: Trucking Conditions Index Climbs to Highest Level Since 2022

Strong freight rates, rising volumes and tighter capacity push trucking conditions higher, though diesel prices could temper gains in the near term, FTR cautions.

Read More →