5 Companies That Had A Rough Week

The Week Ending Dec. 4

Topping this week's roundup of companies that had a rough week is flash storage system vendor Violin Memory, which reported such poor third-quarter results that the company is exploring "strategic alternatives" for its future.

Also making the list was electronic toy maker VTech, which suffered a cyberattack that reportedly compromised data on millions of children; Samsung's agreement to pay $548 million to settle a patent dispute with Apple; retailer Target's agreement to pay millions of dollars to banks in the aftermath of its 2013 security breach; and Microsoft taking criticism from its former CEO about financial disclosures.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves -- or just had good luck -- check out this week's 5 Companies That Came To Win roundup.

Violin Memory Exploring 'Strategic Alternatives' Following Disappointing Q3

Flash storage array vendor Violin Memory has hired an investment banking firm to explore "strategic alternatives to enhance shareholder value" after this week's report of a significant plunge in third-quarter sales.

For the fiscal third quarter ended Oct. 31, Violin Memory reported sales of $12.5 million, down more than 42 percent year over year from $21.7 million. Even more unsettling was the 62 percent decline in product revenue to $6.3 million from $16.9 million one year before.

President and CEO Kevin DeNuccio said the company faces "short-term challenges in achieving predictable, consistent growth." The company also said its board authorized the strategic alternatives review – a step that can lead to the sale of a company or its assets.

VTech Security Breach Exposes Data On 6.4 Million Children

A hacking attack on Hong Kong-based digital toy maker VTech exposed data on 6.4 million children and investigations are under way in the U.S., Britain, Hong Kong and other countries.

The compromised information, which was not encrypted, included childrens' names, genders, birthdays and their photos, according to a story on The Guardian website. The breach also exposed data on 4.9 million parents including names, passwords, and email and postal addresses.

The attack was on VTech's portal used to download games to its computer tablets. VTech has hired FireEye's Mandiant forensics unit to investigate the hack and help secure the company's systems going forward, according to a Reuters story.

Samsung To Pay Apple $548 Million In Patent Dispute

Samsung has agreed to pay Apple $548.2 million in a step toward settling a long-running patent dispute between the two companies. The agreement was disclosed in a statement jointly filed Thursday with the U.S. District Court for the Northern District of Northern California, according to a BBC story.

The dispute, reaching back to 2011, stems from Apple's charges that Samsung violated Apple patents related to the Apple iPhone.

The payment doesn't necessarily end the legal wrangling, however. The payment is part of a bigger $1 billion in damages a jury awarded Apple in 2012, reduced on appeal to $930 million and split into $548 million for alleged technology patent violations and $382 million for alleged copying of packaging materials, according to the BBC.

A trial is slated for the second part of that dispute in 2016. Plus, Samsung said it reserves the right to be reimbursed should it win on appeal or if the U.S. Patent and Trademark Office rules any Apple patents invalid. So the case is far from over.

Ballmer Says Microsoft Should Disclose More Financial Data

Shareholders criticizing corporations for not disclosing enough financial data is nothing new. But people take notice when it's a company's largest shareholder and when that shareholder is the company's former CEO.

This week former Microsoft CEO Steve Ballmer said the software giant needs to be more forthcoming how about how its hardware and cloud businesses are performing – including sharing revenue and profit figures. Ballmer, who recently surpassed former CEO Bill Gates as Microsoft's biggest shareholder, made his comments at Microsoft's annual shareholder meeting this week.

During Microsoft's recent first-quarter earnings call, current CEO Satya Nadella said Microsoft's commercial cloud business was on an $8.2 billion annualized run rate. But in an interview with Bloomberg, Ballmer said Microsoft "should report the revenue, not the run rate."

Target To Pay Banks $39 Million In Security Breach Settlement

Samsung wasn't the only company coughing up millions this week to clean up its legal messes. Retail giant Target will pay $39.4 million to resolve claims by several banks and credit unions that had to reimburse cardholders for fraudulent charges and issue new cards following a massive cyberattack against Target's IT systems in 2013, according to a Reuters story.

The payments are being made to Umpqua Bank, Mutual Bank, Village Bank, CSE Federal Credit Union and First Federal Savings of Lorain – all issuers of MasterCard credit and debit cards that were compromised by the security breach.

In August Target agreed to pay Visa $67 million for costs related to the cyberattack, according to a CNN Money story. And in March Target settled a class-action lawsuit brought by customers for $10 million.