Electronics payment technology vendor VeriFone Holdings saw its shares crash 48.66% to $23.38 after it admitted it will have to restate its accounts as a result over errors which overstated pre-tax income by $29.7m in the first three quarters of this year.
VeriFone CEO Douglas Bergeron said he was committed to ensuring that we promptly and thoroughly remedy this situation.
The San Jose, California-based company said its figures for the first three quarters to July 31 should no longer be relied upon. This was the result of accounting errors related to the valuation of in-transit inventory and allocation of manufacturing and distribution overhead to inventory.
It said corrections are needed to overstated reported inventories in material amounts totaling $54.4m for the three quarters. It said this will reduce pre-tax income by $29.9m over the period. Verifone said these estimates were based on currently available information and might change during the restatement process.
On a more encouraging note, it said that it expects to report revenue for the year to October 31 of $904m, an increase of 55.5% and above the $899.23m that was the consensus of analysts’ estimates.