Equifax calculates massive data breach will cost company at least $140 million

Adjust Comment Print

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.

They have dropped around 25 percent since the company's September 7 disclosure of the breach that exposed sensitive data on 145.5 million consumers.

Equifax is now under multiple state and federal investigations and has been sued by numerous customers in litigation likely to evolve into class-action lawsuits.

The company warned there could be further attacks.

Eric Johnson, dean of Vanderbilt University's Owen Graduate School of Management, said that uncertainty could cost Equifax future business. "I think they can get there, but they aren't there now". Still, it lost $87.5 million from the breach and missed analyst expectation on both the top and bottom lines. Various other investigations now surround the data breach and the company.

"We believe that certain of our customers have determined to defer new contracts or projects unless and until we can provide assurances regarding our ability to prevent unauthorized access to our systems and the data we maintain", it said in the SEC filing.

Self-driving shuttle hit by truck just hours into Las Vegas debut
Navya has a fleet of 50 autonomous shuttle buses deployed worldwide, and says that it has carried over 200,000 passengers so far. The statement also indicated that testing of the shuttle will continue as planned.

Equifax said this month that executives who sold almost $2 million in stock just prior to the disclosure of the hack were unaware of the breach at the time.

The company is now facing more than 240 lawsuits related to the breach and investigations launched by state and federal authorities, including 50 state attorneys general, the Federal Trade Commission, the Consumer Financial Protection Bureau and the Securities and Exchange Commission.

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. Third-quarter revenue climbed 3.8 percent to $834.8 million, missing the $847 million average estimate of 13 analysts surveyed by Bloomberg.

Since the disclosure, the share of Equifax credit files locked or frozen by consumers has gone from 0.5 percent to between 1.5 percent and two percent, according to Gamble.

Net income attributable to Equifax fell to $96.3 million, or 79 cents per diluted share, from $132.8 million, or $1.09 per diluted share, a year earlier. The stock is down around 24 percent since September 7, when Equifax disclosed the breach.