Sat, 20 Jul 2019

NEW YORK, NY / ACCESSWIRE / July 9, 2019 / Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against of FedEx Corporation ("FedEx" or the "Company") (NYSE: FDX). and certain of its officers, on behalf of shareholders who purchased or otherwise acquired FedEx securities from September 19, 2017 through December 18, 2018, inclusive (the "Class Period"). Such investors are encouraged to join this case by visiting the firm's site: www.bgandg.com/fdx.

This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.

FedEx is a global logistics company that ships goods to commercial and residential customers throughout the world.

In July 2016, FedEx significantly expanded its international operations through its $4.8 billion acquisition of TNT Express N.V. ("TNT"), a Netherlands-based logistics company with operations concentrated in Europe. To date, this has been the largest acquisition in FedEx history. This acquisition instantly added billions of dollars of European revenues to FedEx's top line and increased the Company's international revenue mix from 24% in fiscal year 2016 to 33% in fiscal year 2017.

After the acquisition closed, FedEx embarked on an aggressive strategy to integrate it's legacy European operations with TNT. On March 31, 2017, nine months after completing the acquisition, FedEx issued a three-year operating income improvement target for investors to gauge and track the purported benefits of the TNT acquisition and FedEx's integration efforts. Specifically, the Company stated that, in fiscal year 2020, its integration with TNT would result in a $1.2 billion to $1.5 billion operating income improvement above its fiscal year 2017 reported operating income (the "TNT Income Improvement Target").

On June 27, 2017, however, TNT's operations were crippled by a cyber attack known as NotPetya, which involved the spread of a malware virus throughout TNT's systems (the "Cyberattack"). NotPetya is considered one of the largest cyber attacks in history, having affected a multitude of companies on a global scale. The timing of the attack was particularly problematic for FedEx, as TNT's systems were paralyzed during the critical period involving the integration of TNT with the Company's legacy European operations.

The complaint alleges that throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) TNT's overall package volume growth was slowing as TNT's large customers permanently took their business to competitors after the Cyberattack; (ii) as a result of the customer attrition, TNT was experiencing an increased shift in product mix from higher-margin parcel services to lower-margin freight services; (iii) the anticipated costs and timeframe to integrate and restore the TNT network were significantly larger and longer than disclosed; (iv) FedEx was not on track to achieve the TNT Income Improvement Target; and (v) as a result of these undisclosed negative trends and cost issues, FedEx's positive statements about TNT's recovery from the Cyberattack, integration into FedEx's legacy operations, customer mix, customer service levels, profitability, and prospects lacked a reasonable basis.

The Class Period starts on September 19, 2017, when FedEx reported that the Cyberattack had negatively impacted its first quarter 2018 results (ended August 30, 2017). During the related earnings call, however, Defendants assured investors that all critical TNT systems were fully restored and fixes to its customer-specific systems were expected to be finalized by the end of September 2017. Company executives also reaffirmed the TNT Income Improvement Target. Analysts maintained their ratings and price targets on FedEx stock due to the Company's assurances about its recovery from the Cyberattack. On this news, FedEx stock increased $4.50 per share, or roughly 2.1%, to close at $220.50 per share on September 20, 2017.

The truth about TNT's deteriorating business was revealed through a series of disclosures. While making these disclosures, however, Defendants continued to assure investors that FedEx would still meet the TNT Income Improvement Target and that TNT had successfully recovered in the wake of the Cyberattack.

On June 19, 2018, FedEx provided a disappointing capital expenditure outlook for its FedEx Express segment, the reporting segment that includes TNT's results, and reported higher-than-expected TNT integration expenses. On this news, FedEx shares dropped $6.96 per share, or 2.69%, to close at $251.43 per share on June 20, 2018. Despite these issues, Defendants assured investors that the Company was "on track" to meet the TNT Income Improvement Target and that TNT's year-over-year growth had resumed.

On September 17, 2018, FedEx reported lower-than-expected earnings for its first quarter ended August 30, 2018. The Company partially attributed these results to higher-than-expected TNT integration costs. On this news, FedEx stock dropped $14.15 per share, or 5.5%, to close at $241.58 per share on September 18, 2018. Defendants, however, again assured investors that the Company was on track to meet the TNT Income Improvement Target, and touted that the Company's "strong international volume growth reflect[ed] [FedEx's] recovery from the TNT cyberattack."

On December 7, 2018, FedEx announced that David L. Cunningham would retire as FedEx Express' President and Chief Executive Officer ("CEO") on December 31, 2018. Analysts immediately suggested that Cunningham's "retirement" was a result of performance issues within the Company's FedEx Express segment. On this news, FedEx stock dropped $13.67 per share, or roughly 6.4%, to close at $201.39 per share on December 7, 2018.

The full extent of TNT's deteriorating business was revealed to investors on December 18, 2018, after the close of trading. On that date, FedEx reported a large profit miss for its second fiscal quarter ended November 30, 2018. Defendants attributed the disappointing results to lower package volumes in Europe and a negative shift in TNT's product mix to lower margin freight business following the Cyberattack, which had occurred well over a year ago. The Company also lowered its fiscal 2019 earnings guidance and announced that the TNT Income Improvement Target would no longer be achievable by fiscal year 2020. On this news, FedEx stock dropped $22.50 per share, or roughly 12.2%, to close at $162.51 per share on December 19, 2018.

If you wish to review a copy of the Complaint you can visit the firm's site: www.bgandg.com/fdx or you may contact Peretz Bronstein, Esq. or his Investor Relations Analyst, Yael Hurwitz of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484. If you suffered a loss in FedEx you have until August 26, 2019 to request that the Court appoint you as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.

Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm's expertise includes general corporate and commercial litigation, as well as securities arbitration. Attorney advertising. Prior results do not guarantee similar outcomes.

Contact:

Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Hurwitz

212-697-6484 | info@bgandg.com

SOURCE: Bronstein, Gewirtz & Grossman, LLC



View source version on accesswire.com:
https://www.accesswire.com/551258/INVESTOR-ALERT--FedEx-Corporation-FDX--Bronstein-Gewirtz-Grossman-LLC-Announces-Class-Action-and-Lead-Deadline-August-26-2019

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