Updated from Feb. 11
said it found revenue-recognition problems in its internal accounting and has fired various "non-executive" employees for unethical behavior.
The disclosure comes about three weeks after the company delayed the release of its year-end financial results, an announcement that knocked the shares from around $10 on Jan. 20 to $6.69 at Wednesday's close. The stock, which flirted with zero in the dark days of October 2002, gave up another $1.61, or 24%, to $5.08 in premarket Instinet trading Thursday.
The Westford, Mass., maker of network switching gear said it found "certain issues, practices and actions of certain employees relating to both the timing of revenue recognized from certain customer transactions and to certain other financial statement accounts."
Sonus, conscious of the accounting issues that laid low various big optical-fiber players during the bubble period, took pains in its release to make clear that its issues relate to revenue timing, not "whether the sales can be recorded as revenue.
"For the customer transactions under review, the products have been delivered, customers are using the products in their networks, and Sonus Networks has either received payment or is receiving payment for the products in the ordinary course," the company said.
Sonus said it is trying to figure out when the revenue should have been booked and still has no idea when it can file year-end financials. For now, it has "terminated certain non-executive employees" and hired blue-blood Boston law firm Hale & Dorr to assist in an internal probe with PricewaterhouseCoopers.