UTStarcom Plunges on Filing Delay

UTStarcom (UTSI Quote) plunged 15% Wednesday after the maker of short-range wireless networks said it would be late filing its quarterly report with regulators.

The Alameda, Calif., wireless tech company said its second-quarter financial review process flagged a $1.9 million equipment sale that shouldn't have been recorded as revenue. The company said it didn't include the deal in second-quarter numbers, which UTStarcom posted two weeks ago.

The company said it notified its audit committee and began an internal inquiry into the transaction. UTStarcom on Tuesday filed for a five-day extension on its 10-Q with the Securities and Exchange Commission to allow the review to be completed before the company files those results.

"UTStarcom believes that a prudent approach to the filing of our 10-Q is the appropriate course of action as it relates to this review," said finance chief Mike Sophie.

UTStarcom's comments come at a tumultuous time for tech stocks. The market opened sharply lower Wednesday, driven by cautious comments from networking juggernaut Cisco (CSCO Quote), as investors continue to puzzle over the tech sector's prospects.

Meanwhile, UTStarcom shares have been in free fall ever since the company rolled out its mid-June plan to acquire the handset unit of Long Island wireless shop Audiovox (VOXX Quote). Since rising into the low-$30 range ahead of that deal, UTStarcom has seen its stock lose more than half its value, helped along by last week's 28% plunge on a weak third-quarter outlook.

On Wednesday, UTStarcom dropped $2.58 to $15.37.