FedEx shares hit an all time high despite missing Q1 earnings

FedEx Corp. (NYSE: FDX) reported its first quarter earnings for the 2018 fiscal year and missed earnings estimates. Despite missing estimates, FedEx shares hit an all time high of $222.71 on Wednesday.

FedEx reported earnings of $2.51, down from last year’s earnings of $2.82, and missing analysts’ estimates by $0.58. The company reported revenue of $15.3 billion, an increase from the previous year of $14.7 billion, and missing analysts’ estimates by $50 million.

The company reported that earnings were negatively impacted by the cyberattack affecting TNT Express, which the company claims it cut $0.79 per share and Hurricane Harvey, which cut $0.02 per share.

If the attack and Harvey did not affect FedEx’s earnings, the packaging company would have reported earnings of $3.32 per share and also would have beaten analysts’ estimates.

FedEx is a handful of companies that were negatively impacted by the massive NotPetya cyberattack. The NotPetya attack was intended to cripple Ukraine’s government, but also impacted companies that have relations or businesses connected into Ukraine.

The two negative impacts against FedEx caused shut downs or delays in ground delivery services which heavily impacted the company’s sales. The company’s operating margin fell to 7.3 percent from 8.6 percent

“We are currently executing plans to mitigate the full-year impact of these issues.” said FedEx Chief Financial Officer Alan Graf.

“The first quarter posed significant operational challenges due to the TNT Express cyberattack and Hurricane Harvey, and I want to thank our team members for their extraordinary dedication and performance,” said Frederick W. Smith, FedEx Corp. chairman and chief executive officer. “We are confident of our prospects for long-term profitable growth, and we reaffirm our commitment to improve operating income at the FedEx Express segment by $1.2 billion to $1.5 billion in fiscal 2020 versus fiscal 2017.”

FedEx is unable to provide investors guidance for the 2018 fiscal year year-end mark-to-market pension. As a result, the company cannot provide an earnings guidance based on a GAAP basis.

The company is lowering its 2018 fiscal year forecast due to the impacts of TNT Express cyberattack that will affect the company until the end of the year. The company lowered its forecast for fiscal 2018 earnings per share to be in the range of $11.05 to $11.85, from the previous forecast range of $12.45 to $13.25. Thomson Reuter analysts’ forecast earnings of $13.01 per share for the full year.

The company has also announced that shipping rates will increase by an average of 4.9 percent. It will be effective by January 22, 2018.

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