ALAMEDA, Calif.—UTStarcom Inc., a wireless equipment and handset manufacturer, announced it will delay filing its 2005 annual report until the end of April so its audit committee could resolve a premature recognition of $22 million in revenue and complete an assessment of its internal controls for financial reporting.
The company’s stock dropped 7 percent on the news to around $5.79 per share.
UTStarcom said it recognized $22 million in revenue from a contract with a customer in India during several quarters from 2003 through 2005, and resolution of the matter may lead the company to revise previous financial statements.
The issue is the latest in a series of financial stumblings for UTStarcom, which over the past several months has issued a series of warnings to investors, including a drop in anticipated revenues, a Securities and Exchange Commission investigation into certain aspects of the company’s financial disclosures, and a potential write-down of its assets.
UTStarcom acquired the handset business of Audiovox Communications Corp. and supplies phones to the likes of Verizon Wireless, Cingular Wireless L.L.C., Sprint Nextel Corp. and others.
