FedEx Warns of Possible Financial Cost Resulting from Cyber Attack

Published on: 17 Jul, 2017

FedEx Corporation (NYSE: FDX) today filed its annual report on Form 10-K for fiscal year 2017 with the Securities and Exchange Commission. FedEx provided information regarding the June 2017 cyber-attack on the worldwide information systems of TNT Express B.V. (“TNT”), the international express transportation, small-package ground delivery and freight transportation company FedEx acquired in May 2016.

The cyber-attack known as Petya, which involved the spread of an information technology virus through a Ukrainian tax software product, significantly affected the worldwide operations of TNT. FedEx implemented contingency plans immediately following the attack to recover TNT operations and communications systems, the company claims in the report.

FedEx warns, that the attack will have a financial impact. “Given the recent timing and magnitude of the attack, in addition to our initial focus on restoring TNT operations and customer service functions, we are still evaluating the financial impact of the attack, but it is likely that it will be material… Although we cannot currently quantify the amounts, we have experienced loss of revenue due to decreased volumes at TNT and incremental costs associated with the implementation of contingency plans and the remediation of affected systems.”

The company explained that it is unable to estimate at this time how long it will take to restore the systems that were impacted. In addition, it is possible that TNT will be never be able to recover all of the business data that was encrypted by the virus.

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Danny Abramov

Email: danny@financialinsiders.com

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