Cyberattack disrupts Clorox's operations, impacts financial outlook
Clorox (NYSE:CLX), a leading cleaning products manufacturer, has been grappling with significant operational disruptions in the wake of a major cyberattack that occurred in mid-August 2023. The company confirmed on Monday that the attack had caused considerable damage to its IT infrastructure, which led to the shares trading down by over 1%.
The cyberattack forced Clorox's automated order processing system offline, causing delays and product outages. While the company anticipates resuming regular operations in the coming week, it expects some time before it can reach its previous operational levels.
Clorox warned investors that the first-quarter financial results would be substantially impacted due to the fallout from the cyberattack. The company is still assessing the long-term implications of this incident on its fiscal year outlook and will provide further updates once it gains a clearer understanding of the situation.
The cybersecurity threat is not unique to Clorox. Several other companies have also been targeted recently. Consumer firms have been particularly prone, with Equifax (NYSE:EFX)'s shares rising about 90% since a massive data breach in September 2017 impacted 147 million people. The credit reporting agency allocated $425 million for consumer settlements, a figure less than 2% of its current market value.
Earlier this month, MGM Resorts (NYSE:MGM) International and Caesars (NASDAQ:CZR) Entertainment reported breaches that could potentially cost them millions in lost revenue. As businesses increasingly shift their operations to the cloud, security concerns are intensifying.
Check Point Software Technologies (NASDAQ:CHKP), a cybersecurity firm, reported that 48 ransomware groups attacked more than 2,200 victims in the first half of this year alone. This represents an 8% increase in attacks during the second quarter and marks the highest volume of breaches in two years. Manufacturing and retail sectors were identified as being most susceptible to these attacks.
At the time of the attack, Clorox was implementing a multi-year initiative to bolster its digital capabilities. The incident underscores the high cost of implementing new technologies such as artificial intelligence and machine learning, coupled with robust cyber defenses. However, as Clorox's experience illustrates, the financial implications of managing a breach can be even more significant.
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