Re: RSA said companies like Palm are seeking "strong and stable" partners."
Strong and stable like this?!
Cheers. Rob
01/25 14:47
RSA Security Falls on SEC Inquiry About Disclosure (Update3)
By Ron Day
Bedford, Massachusetts, Jan. 25 (Bloomberg) -- RSA Security Inc. shares fell as much as 34 percent after the computer-security software maker said it's being investigated by the Securities and Exchange Commission for insider trading and its disclosure of an accounting change.
RSA Security dropped $5.31 to $11.33 in midafternoon trading of 15 million shares, seven times the three-month daily average. They traded as low as $11. The stock, which reached $62.04 in March 2000, declined 50 percent in 2001.
The SEC is investigating whether the company should have issued a press release about a change in accounting for products shipped to distributors instead of a footnote in its first-quarter SEC filing last year, RSA spokesman Tim Powers said.
``We're doing our own due diligence to see if we're really at fault here. We are fully cooperating with the SEC,'' Powers said.
Investors are jittery about news of accounting issues following the collapse of Enron Corp., whose bookkeeping is the subject of federal investigations, analysts said.
``It's causing some investors consternation,'' said Robert W. Baird & Co. analyst Steven Ashley. ``This isn't a big deal but when you mention SEC contact on the heels of Enron, that's all you need,'' said Ashley, who doesn't own RSA Security shares and rates them ``market outperform.''
Credit Suisse First Boston analyst Todd Raker said in a research note that ``uncertainty could hang over the stock in the near-term.''
Revenue Recognition
In the first quarter of 2001, RSA Security said in its 10-Q filing with the SEC that it ``began recognizing revenue upon shipment to distributors rather than upon sell-through.'' The company previously recognized revenue to distributors ``upon receipt of evidence of sale to end-users.''
Company officials told analysts in a conference call late yesterday that the accounting change resulted in an additional $3 million in revenue last year, said Ashley, who listened to the call. RSA Security had 2001 revenue of $282.7 million.
RSA Security had a fourth-quarter loss of $10.1 million or 18 cents a share, compared with net income of $103.9 million, or $1.70, a year ago, the company said late yesterday. Sales fell 19 percent to $63 million, less than the $64 million average estimate of analysts surveyed by Thomson Financial/First Call.
Excluding some acquisition and restructuring expenses, the company said it would have earned 1 cent, matching the average First Call estimate.
Bedford, Massachusetts-based RSA which makes programs that let companies verify the identity of users logging on to Web sites and networks. It competes with companies including VeriSign Inc., which late yesterday said profit this quarter and year will lag analysts' estimates.
Massachusetts Financial Services was RSA Security's largest shareholder, with 20.7 million shares as of Sept. 1, according to Bloomberg data.
quote.bloomberg.com |
