In an update of the review of the “accounting issues” that arose earlier this year, comScore said its audit committee is still studying the information it has collected and needs more time before it can complete financial reports for last year and the first quarter of this year.
The issue has impacted comScore’s stock and threatens its listing on NASDAQ. comScore stock was down 18% in late morning trading Tuesday. Analysts say the review involves how some non-cash transactions were accounted for.
“The Audit Committee continues to work vigorously to complete its review and to report its findings to the Board. To this end, the independent counsel and other advisers to the Audit Committee have completed a substantial amount of their factual inquiries to address the Audit Committee’s review. The Audit Committee and the Board, however, require further time to evaluate the information collected and to reach and evaluate final conclusions,” comScore said in a filing with the SEC Monday.
“In the meantime, the Company’s management and independent public accounting firm have commenced work to review the information collected so that the company is in a position to file its Forms 10-K and 10-Q as soon as reasonably practicable,” the company said.
Analyst Tom Eagan of Telsey Advisory Group was disappointed with the update and downgraded the stock to “market perform.”
Eagan said the delay might affect comScore’s financials and lowered his estimates for the company’s earnings.
“We also wonder whether the financial integration of comScore and Rentrak is proceeding according to plan and whether the guidance given will be maintained,” Eagan said in a report Tuesday. “As comScore reveals its FY15 10-K and 1Q16 10-Q, and provides updated financials, we expect this could further lead to estimate changes.”
comScore in February disclosed that certain potential accounting measures would prevent it from filing its annual report for 2015 and its quarterly report for first quarter ended March 31, 2016.
The company said in May that an update would come June 27.