VeriFone Off by Half on Accounting Issues

VeriFone (PAY) shares have been cut in half Monday morning following the company’s announcement that it will have to restate earnings due to the discovery of some accounting irregularities.

VeriFone, which makes electronic payments systems, said it has concluded that its earnings reports for the quarters ended Januyary, April and July 2007 should not be relied upon, due to “errors in accounting related to the valuation of in-transit inventory and allocation of manufacturing and distribution overhead to inventory, each of which affects VeriFone’s reported costs of net revenues.”

The company expects to restate results for those periods. VeriFone says it expects to reduce reported inventories by $7.7 million, $16.5 million and $30.2 million for the January, April and July quarters respectively. Pre-tax income will be reduced $8.9 million, $7 million and $13.8 million for those three periods. The company said it is still evaluating the after-tax impact.

VeriFone says they are also correcting “unrelated errors.” The nature of those other errors was not specified in the company’s announcement.

The company said it expects revenue for the fiscal quarter quarter ended October 31 of $238 million. The Street had been looking or $233.6 million.

VeriFone says it expects to restate the previous results in January 2008.

The company will hold a conference call with the Street at 2 p.m. Eastern.

VeriFone shares are down $23.20, or 48.3%, at $24.83.

Comments

[Dan Jacome:]

gorilla trades.com was long this stock and they BLEW UP today...oh well, I must say that the goriilla has been doing a good job up until now, but surely this will get some trial subs to reconsider the service.

2007 Dec 03 07:13 PM

[INURFACE:]

Can anyone comment on the legal actions of all the law suits against Verifone and when will these JERKS go to jail without collesting $200.00

2008 Jan 04 08:13 AM