Sony Hack Still Causing Headaches and Now Earnings Delay
It never rains, but it pours. And for Sony, the forecast calls for flooding. On Friday, the company announced that the latest consequence of the massive system intrusion it suffered in November would be a delay in its quarterly earnings report.
The Tokyo-based electronics and entertainment conglomerate filed a request with the Financial Services Agency of Japan (FSA) to delay its earnings report for the fiscal quarter ending Dec. 31, 2014. The company is asking for an extension of its deadline, which normally would have been Feb. 16, until March 31.
Destruction of Network Hardware
In November, Sony Pictures Entertainment, Sony's studio subsidiary, was the victim of a cyberattack against its network and IT infrastructure by a hacker group calling itself the Guardians of Peace. The hack took down the studio's computers for several days, and resulted in a massive loss of confidential data, including private e-mail correspondences between executives and digital copies of entire, then-unreleased, movies.
But the loss of data, as painful as it was, appears to have been only part of the damage the attack did to Sony. "As a result of the cyberattack, which has been now recognized as a highly sophisticated and damaging cyberattack, a serious disruption of SPE's network systems occurred, including the destruction of network hardware and the compromise of a large amount of data on these systems," Sony wrote in a filing with the FSA. "In response to this cyberattack, SPE shut down its entire network."
According to the filing, the company is still struggling to recover from the attack, with several major systems still off-line, including the studio's financial and accounting systems. Sony said that, due to the extent of the damage, much of its key network infrastructure for these systems would remain offline until next month. That timeframe will not give the company sufficient time to conduct the usual process of preparing its quarterly financial report in time for the Feb. 16 deadline.
Impact 'Not Material'
Sony had planned to issue its earnings release and hold conferences calls for the press and equity analysts about the consolidated financial results for the previous fiscal quarter on Feb. 4. Although it will not be able to include any information on is financial results, the company has said it still plans to issue a press release and speak to press and analysts regardless.
Despite the delay and the massive damage the company cited as its reason for requesting an extension, Sony insisted in its filing that the financial damage of the attack is nothing to worry about.
"While Sony continues to evaluate the impact of the cyberattack on its financial results, it currently believes that such impact is not material," it said.
The damage to the accounting and financial systems was limited to the Sony Pictures Entertainment subsidiary, which is headquartered in Los Angeles, and did not include the company's electronics or financial divisions, which will file their earnings as normal. However, Sony as a whole will be unable to file its complete results until the studio is able to make its numbers final.