Janina Lim – Fourth Estate Contributor
Atlanta, GA, United States (4E) – Equifax Inc.’s recently issued projections on its fourth quarter profit failed to level with Wall Street’s expectations as the firm strives to win back business deals that were stalled by a security breach in its system.
The credit-reporting company pared down its profit for the October to December round to be pegged at $1.38 per share from the earlier outlook of $1.32.
The figure lies below analysts’ average forecast of $1.42 per share.
On revenues, the firm cut its levels by 3 percent to 4 percent during the period, to total $825 million to $835 million versus the $833.65 million average of analysts’ estimates.
The company blamed the massive breach of its consumer data earlier this year would dampen sales and result in costs of $60 million to $75 million during the period.
Although the firm declined to provide estimates on total costs deriving solely from the breach when asked by analysts on a Friday call.
As such, contract signing from business and government customers have since seen delays as early as the onset of the July to September period and persisted through the current quarter.
“We’re hoping to win back their trust and then be able to regain the business that we’ve indicated has been deferred,” Chief Financial Officer John Gamble was quoted, adding that “we’re still working through that process.”
Shares of Equifax have stooped by about 25 percent following the company’s Sept. 7 announcement of the breach that may have had 145.5 million people exposed to risks of having their sensitive information stolen by a yet unknown identity.
Equifax stocks were litte changed in mid-trading day following the slash in its fourth quarter outlook.
According to Stephens Inc analyst Brett Huff, investors are still on a wait-and-see approach for hints that will help them assess whether the breach will have a long-term impact on the company’s profitability, while pinning hopes on the latest management commentary that “generally supports the view that the long-term business model looks at least okay.”
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