It seems to me that an explanation on the accounting is this: the internal unaudited numbers for the fourth quarter, when added to the unaudited numbers for the first three quarters, comes to a certain number, which is not the $.43 which the auditors give for the whole year. And it is probably more than a penny difference.
Now this could be fairly benign as far as the accounting discrepancies go, or it could be a harbinger of something deeply wrong.
But assuming no one is cooking the books, and the accountants and auditors are simply sorting out paperwork differences, you still could suspect something foul. Let us suppose the internal numbers give lower numbers than the auditors gave, say, 9 cents for the fourth quarter, and .40 for the year. By saying nothing about the discrepancies they avoid addressing the embarrassing accounting problem (where they reported lower than actual earnings), and they avoid reporting the earnings shortfall for the last quarter.
If the internal number for the 4th quarter and year were higher than confirmed by the audit, say $.15 and $.46, then I guess it would be fairly benign, but I suppose you could imagine a lawsuit by those who bought on overstated earnings in prior quarters.
But until we know the truth of the matter, it is hard to say what to make of it. I am still just monitoring this stock, although it seems to have a strong franchise.
Geoff Wren |
