NEW YORK (TheStreet) -- Valeant Pharmaceuticals (VRX) stock is surging 9.04% to $82.78 in morning trading Tuesday after the pharmaceutical company confirmed that it will have to restate previous earnings in light of concerns about its accounting practices.

About $58 million of revenues recognized during the second half of 2014 should have been reported the following year, according to a statement. Valeant will consequently lower its 2014 per-share earnings by 10 cents and increase its 2015 per-share earnings by 9 cents. 

The misstatements were tied to shipments of Valeant products to former distributor Philidor. 

Valeant invested $100 million in Philidor at the end of 2014, which gave the company the option to acquire Philidor without additional payment. Valeant should have delayed recognizing revenue from Philidor sales until the products were sold to patients, rather than delivered to Philidor, the statement continued. 

Valeant announced that it plans to report 2015 fourth quarter earnings before the market open on February 29. 

Typically with revenue recognitions, there are other authorities involved that don't like the shift in earnings, TheStreet's Jim Cramer said on CNBC's Squawk on the Street this morning.

He added that a company can't clear itself, and that this doesn't mark the  end of Valeant's troubles. 

"They can't say, hey listen SEC, we looked it over and it's all good," Cramer said. "It doesn't work like that."

Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.

Valeant's strengths such as its robust revenue growth, good cash flow from operations and expanding profit margins are countered by weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and generally higher debt management risk.

You can view the full analysis from the report here: VRX

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.

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