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Micromuse Hurt by Accounting Questions

The software company says it will restate earnings for the fiscal years 2000 to 2003.
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Updated from 10:01 a.m. EST

The muse has spoken: Sell.

That's the case with shares of

Micromuse

(MUSE)

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Tuesday, after the business software company said it is delaying the filing of its 10-K annual report and will incur additional costs because of an internal accounting inquiry.

Recently, shares were down 20 cents, or 2.9%, to $6.70, after falling more than 8% in early trading.

The San Francisco-based company also said it will restate earnings for the fiscal years 2000 to 2003 and incur about $2 million in "previously unanticipated professional fees and expenses related to the accounting inquiry."

The company said the inquiry involves "the accounting for accrued expenses and expense recognition."

The unfolding accounting issues overshadowed the company's improved sales guidance for the first quarter of 2004. Micromuse said it now expects revenue to be at "the high end of or slightly exceed our previously issued revenue guidance of $34 to $35 million."

Micromuse's fiscal year runs through Sept. 30.