Case in point: SAIC confessed in July that “information … stored on a single, SAIC-owned, non-secure server at a small SAIC location, and in some cases … transmitted over the Internet in an unencrypted form … was placed at risk for potential compromise.” In the context of other firms having actual knowledge of miscreants accessing their data, and in some cases using it in actual identity theft schemes, SAIC’s warning of “risk for potential compromise” sounds pretty tame. Still, the company has hired Marsh & McLennan (NYSE: MMC) subsidiary Kroll to help patch its security, and it would take at least $7 million to $9 million in charges in its second fiscal quarter to fix the breach.
What management does:
That won’t do any good for the trend of declining gross, operating, and net margins at SAIC. But to put things in perspective, the midpoint of the range SAIC posited, $8 million, represents just one-tenth of one percent of the firm’s cost of goods sold over the last 12 months. For a company this big, the financial cost of the breach isn’t a tragedy, folks. It’s a rounding error. (Motley Fool, “Foolish Forecast: SAIC’s Chance to Shine“)
I’ve been predicting this sort of response from the market for a long time. It’s nice to see it arrive at a respected consumer-oriented site.