FREMONT, Calif. Avanti Corp. stock tumbled nearly 20 percent Wednesday (Jan. 31) after the company abruptly delayed its fourth-quarter 2000 earnings release by two weeks. But the EDA company's reporting delay probably isn't due to a revenue or earnings shortfall, according to an analyst who follows the company.
Avanti was planning a Jan. 30 earnings release and conference call but cancelled these at the last minute, stating in a press release that Avanti is "still in the process of completing its year-end audit." The company said it will release its quarterly results on or before Feb. 15. Company representatives declined any further comment.
But Daro Toomajarian, an analyst at Dain Rausher Inc., was able to provide some insight. "It's postponing due to what the company called bookkeeping discrepancies raised by its accountants while going through the year-end audit," he said. "This raises the possibility that exactly where, and when, Avanti recognizes revenues might be an issue. But I don't think any major restatement of numbers will be in order."
Toomajarian said he wasn't expecting Avanti's numbers to fall short of analyst expectations. When that's going to happen, he noted, companies normally pre-announce their earnings shortfalls and Avanti has made no such announcement.
Toomajarian noted, however, that Avanti's abrupt pullback "sends a bad message to the Street." While Avanti stock was trading around $24 Jan. 30, investors sent it as low as $18 Jan. 31, recovering to near $20 at the end of the day.