slashed fourth-quarter and 2002 estimates Tuesday and said it would restate almost two years' worth of financial results to reflect changes in its accounting treatment for several transactions. It also disclosed an SEC inquiry.
Houston-based Hanover, which makes pumps to transport natural gas, said the restatements relate to its Hampton Roads joint venture as well as its acquisition of two compressors and its sale of three turbine engines and a compressor.
The revisions are expected to reduce the firm's 2000 earnings by 11 cents to 77 cents a share and will cut earnings for the nine months ended Sept. 30 by about 2 cents a share to 84 cents.
Hanover said the
Securities and Exchange Commission
has requested information relating to its Hampton Roads partnership. In addition, the firm announced that it was ousting its chief financial officer William Goldberg and replacing him with John Jackson, formerly CFO of Duke Energy Field Services in Denver.
Meanwhile, Hanover sliced its fourth-quarter earnings estimate to between 16 cents and 21 cents per share, well below the 39-cent estimate. It also cut its outlook for 2002 to $1.40 to $1.50 a share, below estimates of $1.67 a share.
In late January, Hanover conceded that it made investments in a number of joint ventures, including a 25% stake in a partnership called Hampton Road Shipping Investors II LLC. The firm said it was "reviewing the transactions of this joint venture and the related accounting" after an article in
The Wall Street Journal
suggested that the company inflated revenue and earnings during periods when executives sold millions of shares.
Shares fell 1% to $13.92 Tuesday and have fallen sharply since news of the accounting problems first broke earlier this year.