VeriFone Plunges on Accounting Errors

Shares of VeriFone Holdings Inc. (PAY) plunged nearly 50% early Monday after the electronic payment facilitator said accounting errors caused it to overstate its earnings over the first three quarters. The maker of credit card readers and point-of-sale systems said restatements will reduce its previously reported income by $8.9 million in Q1, $7 million in Q2 and $13.8 million in Q3; the firm is still evaluating the impact the restatement will have on net income during those periods. According to its previous earnings reports, the company earned $31.1 million in Q1, $32.6 million in Q2, and $35.6 million in Q3. Q4 results, which were due to be released Thursday, will be delayed. VeriFone said it expects Q4 revenue of $238 million and full-year revenue of $904 million; in September, the company forecasted Q4 revenue of $231 million to $233 million; analysts surveyed by Reuters had been expecting Q4 revenue of $233.5 million and full-year revenue of $900 million.

VeriFone expects to file restated, Q4 and full-year reports in January. "I am very disappointed to have to bring you this news and am committed to ensuring that we promptly and thoroughly remedy this situation and move forward with the business of delivering value to our shareholders. I am committed to regaining your confidence in VeriFone," CEO Douglas G. Bergeron said. Shares are down 47.2% to $25.39.

Sources: Press release, Wall Street Journal

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.