Sonic Automotive Takes $30M Hit from CDK Ransomware Fiasco but Investors Stay Cool
Sonic Automotive’s IT outage due to CDK Global’s ransomware attack cost the dealership about $30 million, impacting pre-tax GAAP income and diluting per-share earnings by $0.64. Despite this, shares rose over 12 percent, thanks to strong performance in other areas.
Hot Take:
Well, well, well, it looks like Sonic Automotive took a $30 million joyride down Ransomware Lane. Maybe next time, they’ll invest in a security system stronger than the one guarding my grandma’s cookie jar!
Key Points:
- Sonic Automotive’s pre-tax GAAP income dropped by $30 million due to CDK Global’s ransomware attack.
- Additional compensation costs for staff and contractors during the outage amounted to $11.6 million.
- The incident diluted per-share earnings by $0.64, reducing expected earnings from $1.18 to $0.54.
- Sonic Automotive shares rose more than 12% despite the financial hit, buoyed by strong overall performance.
- Other car dealerships, including Ashbury, AutoNation, and Group 1, also reported significant impacts from the CDK outage.
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