Equifax haunted by cyberattack as costs, lawsuits increase

10 November, 2017, 22:36 | Author: Leticia Walters
  • After security breach costs, Equifax clears Q3 with $96M profit

"I have high confidence... we will emerge from this an even stronger company", said interim chief executive Paulino Barros, who was installed after the previous boss resigned.

The credit bureau is also facing more than 60 government investigations from states, USA federal agencies and the British and Canadian governments, the earnings report revealed.

The Atlanta-based company said it recorded $87.5 million in expenses related to the hack during the quarter, including legal fees, investigation of the breach, and free credit monitoring for US consumers whose data was exposed in the breach.

"We're hoping to win back their trust and then be able to regain the business that we've indicated has been deferred", CFO John Gamble said in the call.

Equifax estimated a range of additional costs between $56 million and $110 million to continue providing the free services.

Equifax said it incurred $27.3 million of costs related to the incident last quarter. Equifax has agreed to provide the TrustedID Premier credit monitor to all USA consumers free for one year. Social security numbers, identification, addresses and personal information held by Equifax and the two other, major credit agencies is used to determine a person's creditworthiness.

"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", Equifax said.

Equifax shares (efx) were little changed in midday trading.

Equifax executives are scheduled to take questions from analysts during a conference call on Friday at 8:30 a.m.in NY. U.S. Information Solutions, the firm's largest unit, where Equifax houses its flagship credit database, said revenue dropped 3 percent.

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. The average estimate of 14 analysts surveyed by Bloomberg was for adjusted profit of $1.49 a share.

Equifax needs to do a better job of communicating whether it believes the hackers are still inside its network, said Mark Rasch, a former USA federal cyber-crimes prosecutor who advises businesses on responding to breaches. The company expects revenue of $825 million to $835 million, compared to the average analyst forecast of $833.65 million.

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