Equifax stock falls, breach still sapping profit
Equifax Inc. EFX, +0.40% reported Wednesday its second-quarter net income dropped 12% from a year earlier on higher expenses, including those related to its massive 2017 data breach.
The credit bureau reported a profit of $144.8 million, or $1.19 a share, compared with $165.4 million, or $1.36 a share, a year earlier. When adjusted for costs related to its 2017 data breach, tax-related issues and acquisition-related expenses, earnings were $1.56 a share. Analysts polled by FactSet were expecting adjusted earnings of $1.54 a share.
In September 2017, the company disclosed that a breach had potentially compromised the personal information of 140 million U.S. consumers, including their names, dates of birth, addresses and Social Security numbers. That number later swelled to 147.9 million.
Operating expenses were $683.3 million, compared with $590.8 million a year earlier. Net expenses related to the 2017 data breach and information-technology security costs were $36.3 million in the quarter, when adjusted for a $35 million cybersecurity insurance recovery.
Equifax reports that it has incurred $314 million of expenses related to the breach since its September 2017 announcement. It is expecting $85 million of breach-related expenses in third quarter and $300 million for the full year, excluding insurance recoveries.
Revenue for the quarter was $876.9 million, up 2.3% from a year earlier, as revenue growth in its international and workforce solutions divisions offset a 2% decline in revenue in its total U.S. information solutions business.
The company said it is expecting third-quarter revenue between $853 million and $863 million, and adjusted per-share earnings between $1.39 and $1.44.
For the year, the company is expecting revenue between roughly $3.43 billion and $3.53 billion, and adjusted earnings between $5.80 and $6 a share, unchanged from prior guidance.
Shares of Equifax were down 2.9% at $124 in post-market trading. The stock is up 8.3% so far this year.
Write to Robert Barba at [email protected]
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