Saturday, 18 November, 2017

Equifax profit slumps after data breach, still tops views

Equifax After security breach costs, Equifax clears Q3 with $96M profit
Juana Turner | 11 November, 2017, 00:51

A day after posting sizeable profit declines due to a massive data breach, Equifax says it expects to incur related costs of between $60 million to $75 billion in the current quarter. Equifax has agreed to provide the TrustedID Premier credit monitor to all USA consumers free for one year.

The company said it was not possible to estimate the cost of litigation and government investigations.

Equifax reported $834.8 million in revenue in its third quarter, which is up 4 percent from the same time a year ago; analysts had expected this, as the bulk of the company's money comes from selling services to other business, not consumers.

Equifax's latest financials lay bare the costly fallout from the embarrassing security breach that exposed 143 million customers' privates in the U.S. and 15.2 million in the UK. Equifax has not said how much cash it intends to set aside to cover legal costs. Still, it lost $87.5 million from the breach and missed analyst expectation on both the top and bottom lines.

The company gathers data on consumers to help lenders determine borrowers' creditworthiness.

"What I want to know is 'How did they get in?' and 'How are they preventing hackers from getting in the future?' They haven't answered those questions", said Rasch.

Equifax also said in its filings that it had received subpoenas from the Securities and Exchange Commission, as well as the U.S. Attorney's Office for the Northern District of Georgia "regarding trading activities by certain of our employees in relation to the cybersecurity incident".

Equifax's net income of $96.3 million was down 27% from $132.8 million a year ago and more than 71% from $165.4 million in the second quarter.

Atlanta-based Equifax reported a 3 percent drop in its US revenue in the third quarter to $308 million, but was able to make up the difference and then some from its global services, resulting in an overall 4 percent increase in revenue to $835 million.

That includes the costs to investigate the hack, legal fees and expenses for offering consumers free credit file monitoring and identity theft protection to its USA consumers.

Equifax shares dropped 1.2 percent to $107.65 at 4:47 p.m.in late NY trading after the announcement. The stock is down around 24 percent since September 7, when Equifax disclosed the breach.

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