The share price of electronic payment systems provider VeriFone Holdings Inc. (Nasdaq: PAY; TASE: PAY) plummeted, opening down 37% on Nasdaq, and closing down over 46% on the TASE, after announcing that it would restate its earnings for the first three fiscal quarters of the year because of accounting errors. Trading in the shares on the Tel Aviv Stock Exchange was halted for about 40 minutes late in the day. The shares were down over 44% by mid-day trading on Nasdaq.
VeriFone said that errors in accounting related to in-transit inventory meant that its "previously reported results for those periods cannot be relied upon." The company added that the restatements would reduce pretax income by $8.9 million in its fiscal first quarter which ended January 2007, $7 million in the second quarter and $13.8 million in the third quarter, and that it was evaluating the impact of the restatement on net profits.
VeriFone will also delay publication of its financial report for its fiscal fourth quarter, which ended on October 31, until the review is completed. The report was to be issued on Thursday, but will probably be published in January, along with the restated quarterly reports and annual report.
The company says that it expects to record $238 million revenue for the fourth fiscal quarter and $904 million for the fiscal year. In September, the company predicted $231-233 million revenue for the quarter. The analysts' consensus is $233.5 million revenue for the fourth fiscal quarter and $899 million for the fiscal year.
Published by Globes [online], Israel business news - www.globes-online.com - on December 3, 2007
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