Equifax breach will continue to take financial toll on company, executives warn

Gladys Abbott
November 11, 2017

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

Equifax executives testified Wednesday to a U.S. Senate committee on the breach, with acting CEO Paulino do Rego Barros Jr. responding to one inquiry that he did not know whether the company is now encrypting data in its databases that house consumer credit information, while emphasizing the company uses multiple techniques besides encryption to guard against hackers.

"We recognize that we have an important journey in front of us to regain the trust and confidence of consumers and our business customers".

Equifax said it incurred $27.3 million of costs related to the incident last quarter.

Revenue from mortgage solutions represented about 12.6% of the company's $307.7 million in total revenue during the quarter.

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Equifax also said many customers of the U.S. Information Solutions business, which are largely financial institutions, are requiring the credit bureau to perform security audits of its systems. "And to date, we do not have any evidence that we can probably add problem activity to data stolen from Equifax".

Equifax shares were little changed in midday trading. It has slumped 24 percent since the hack was disclosed.

All told, the company said Thursday that its net income fell to $96.3 million, or 79 cents per share, for the three months ended September 30. The company said its adjusted earnings per share were $1.53.

That beat analysts' consensus forecast of $1.49 per share, according to Zacks Investment Research. The company expects revenue of $825 million to $835 million, compared to the average analyst forecast of $833.65 million. "Even if that number fails to capture those Equifax has directly notified because state law mandated it, or because their credit card information was part of the information compromised by the breach, it remains quite possible that millions of individuals do not know for certain if their information was exposed".

"It is deeply concerning that only slightly more than 20 percent of affected individuals have successfully used this tool, which you said you have been promoting heavily through social and other media".

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