said Friday it will postpone its fourth-quarter and 2000 earnings release to deal with "complex accounting issues related to revenue recognition," and said it expects to take a "substantially larger" restructuring charge due to its cost-cutting actions.
Shares of Covad slipped 81 cents, or 28.26%, to $2.06 in pre-open
activity, down from Thursday's closing price of $2.88 on the
. Shares were not trading on the Nasdaq at Friday's open.
The Santa Clara, Calif., provider of broadband Internet services, which had planned to report earnings on Feb. 27, said the accounting issues relate to revenue recognition, new accounting rules, restructuring charges and asset impairments. The review, which includes evaluating its Internet service provider contracts, may affect previously reported results, Covad said.
The broadband service provider has been facing a glut of troubles of late, including
deadbeat customers and
financial woes that have led it to
On Dec.12, 2000, the company said it expected to record about $20 million in
fourth-quarter restructuring charges and lower-than-expected revenue. It said today the charge would be "substantially larger than $20 million, with a portion allocated to 2000 and the remainder allocated to 2001," and that it plans to "aggressively pursue additional cost cutting opportunities."
"We have made a number of significant changes to our business in the past several months to put Covad on a quicker path to profitability,'' the company said. "Accurately accounting for these changes is essential, and we simply need the extra time to ensure we review these changes and report them correctly."