Wireless Facilities Down on Accounting Research Note (Update1)
By Dana Cimilluca
San Diego, California, Nov. 29 (Bloomberg) -- Wireless Facilities Inc. shares fell 6.7 percent after a group that studies accounting practices said the amount of services it had yet to bill for jumped 65 percent.
San Diego, California-based Wireless Facilities, which helps companies build and manage wireless networks, fell $2.50 to $35 in trading of 1.5 million shares, more than triple the daily average over the past three months. The stock is down 79 percent from a record of $163.50 in March.
Unbilled accounts receivable rose to $53.5 million in the third quarter from $32.4 million in the second quarter, the Center for Financial Research and Analysis Inc. wrote in a note yesterday. The increase is due to Telcel, the wireless unit of Mexico's largest phone company, Telefonos de Mexico SA, Wireless Facilities said.
Wireless Facilities said it discussed this on a conference call when it reported earnings a month ago. It expects to bill and collect money for these services in the fourth quarter.
``This is appropriate financial accounting,'' said Thomas Munro, president. ``It's frustrating to have such a superficial analysis affect the stock price as it has.''
Telcel accounted for 8 percent of Wireless Facilities' sales in the third quarter, said spokesman Mark Francois.
The amount of services Wireless Facilities had yet to bill for rose to 73 percent of third-quarter sales, the center said, from 54 percent of revenue in the second quarter.
The Rockville, Maryland-based Center for Financial Research was started by Howard Schilit, author of the book ``Financial Shenanigans: How to Detect Accounting Gimmicks and Fraud in Financial Reports.'' The report was titled ``Increase in Unbilled Receivables and Other Operational Concerns in 3Q.''
quote.bloomberg.com
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I'm missing the concern here. Better than if they recognized the revenue first and collected later.
Jack |
