The shares of The Home Depot, Inc. (NYSE:HD) rose 0.95% after the company eliminated recent data breach malware and added advanced encryption for user-date protection. Further, Home Depot raised its EPS outlook for fiscal 2014 to $4.54, higher than earlier estimate of $4.52.
The Home Depot, Inc. (NYSE:HD) announced that is has removed the malware responsible for the data breach in its U.S. and Canadian networks. The company reported that criminals designed a custom-malware to avoid detection in a cyber-attack, which revealed payment card details of nearly 56 million customers. Home Depot has replaced any infected terminals and removed the malware from its store network along with a new security provision for payment data.
Frank Blake, CEO of The Home Depot, Inc. (NYSE:HD), said,
“We apologize to our customers for the inconvenience and anxiety this has caused, and want to reassure them that they will not be liable for fraudulent charges.”
Further, the company is providing free identity protection services to the customers who used payment card at Home Depot store after April 2014.
Home Depot has placed a new encryption/security system from Voltage Security, Inc. and two independent IT firms have validated the system. The Home Depot, Inc. (NYSE:HD) increased its diluted EPS guidance for the third quarter 2014 to $4.54.
Home Depot, however, was unable to calculate the overall cost involved in the cyber attacks and these were not included in its earnings guidance. Some of the major components of these costs include card re-issuance cost and credit card fraud reimbursements to the credit card companies, civil litigation liabilities, government investigation and associated charges, legal and investigation expenses. These charges are likely to affect its quarterly earnings towards the end of the quarter.
This article has been written by Prakash Pandey.