By Daniel Yee – The Canadian Press
ATLANTA (AP) – The data compiler ChoicePoint Inc. (NYSE:CPS) reported a US$72.2 million loss for the third quarter as it absorbed charges related to businesses that are up for sale.
The Alpharetta-based company, which collects, sells access to and analyzes consumers’ personal information, said Tuesday its loss amounted to 86 cents per share in the three months ended Sept. 30.
That compared with a profit of $39.6 million, or 43 cents per share, in the same period a year ago. Revenue in the quarter increased to $246.7 million from year-earlier $237 million.
"The results are clearly mixed, reflecting both the progress we are making as well as the work we still need to complete," said Doug Curling, company president and chief operating officer. "We need to get our retooling wrapped up and our new product development ramped up. It’s almost over and we are making progress."
Curling said he was "obviously not pleased" with the company’s level of revenue growth.
"We’re all working hard to . . . restore momentum in revenue growth," Curling said.
The results included a charge of $25.7 million, or 31 cents a share, primarily related to previously-disclosed plans to sell smaller non-strategic businesses, including its Precision Marketing, Bode Technology Group and EquiSearch operations businesses as a result of its company-wide strategic review. It also took a non-cash charge of $81.6 million after taxes to reduce the value of businesses on its books. No sale deal has yet been reached.
Its shares fell $1.16, or 3.25 per cent, to $34.52 in afternoon trading on the New York Stock Exchange.
In January, ChoicePoint agreed to pay $15 million to settle Federal Trade Commission charges related to allegations its security and record-handling procedures violated consumers’ privacy rights when thieves infiltrated its massive database.
But another investigation of its top two executives by the U.S. Securities and Exchange Commission related to stock sales continues.
The data breach involved thieves posing as small business customers who gained access to ChoicePoint’s database, possibly compromising the personal information of 163,000 Americans, according to the FTC.
The company discovered the breach more than four months before disclosing it to the public in February 2005. ChoicePoint has said authorities asked it to keep the information secret initially.
ChoicePoint announced Monday its first consumer advocate position "as part of an on-going effort to make the company’s processes more transparent to consumers," according to a company statement. Katherine Bryant, a member of the company’s legal team, was appointed to the post, which includes developing new consumer policies, leading company teams that assist customers and serve "as an internal champion of the benefits assisting consumers."
For the first nine months of the year, ChoicePoint said it lost $6.7 million, or eight cents a share, compared with a profit of $112.9 million, or $1.23 a share, for the same period a year ago. Nine-month revenue rose to $721.2 million from $685.6 million a year ago.
ChoicePoint collects data on individuals, including Social Security numbers, real estate holdings and current and former addresses. It also offers businesses, government agencies and nonprofit organizations software technology and information designed to anticipate and respond to economic and physical risk, and it analyzes information for the insurance sector. Its database contains about 19 billion records.
ChoicePoint expects full-year internal revenue growth from continuing operations to be in the range of four per cent to six per cent. Including the effect of acquisitions, total revenue growth is expected to be in the range of five per cent to seven per cent for the full year, the company said Tuesday.
"I believe the toughest quarters are now behind us. . . . We’re excited with what we can achieve in 2007," Curling said.