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NEW YORK (Dow Jones)--Shares of Merge Technologies Inc. (MRGE) fell 23% Friday after the software services provider delayed its fourth-quarter filing in order to complete an audit of its financial statements, as preliminary revenue for the period appears below Wall Street estimates.
"As a result of the complexities associated with accounting for sales transactions in the fourth quarter, our year-end audit has not been sufficiently completed and, accordingly, we are not publishing complete financial results at this time," according to Chief Executive Richard Linden.
Merge said it expects fourth-quarter revenue of $23 million to $26 million. Analysts surveyed by Thomson First Call expect revenue of $35.4 million.
The delay is most likely due to deferred revenue, according to Moors & Cabot analyst Ron Opel.
"Bookings for the quarter were up sequentially, indicating growth," Opel said, but given only part of the revenue will be recorded in the fourth quarter, "that tells me that a lot revenue will instead be recognized over the next several quarters."
"Auditing issues conjure up ethical difficulties, but you don't see any of that content here," Opel said, adding he does have a long position in Merge shares.
Other analysts were concerned acquisitions, such as that of Paris-based medical software company, Axicare, by Merge's Cedara division could be causing lumpiness in the the company's revenue.
According to a Canaccord Adams research note from Feb. 9, analyst Jeff Rath said risks to the company "include the eMed, Merge and core Cedara integrations subsequently facing significant integration challenges which could affect revenue, profitability, business prospects and valuation."
The company is holding a conference call at 10 a.m. ET.
Merge shares recently traded at $20.25, down $4.17, or 16.9%, on volume of 6.9 million shares. Average daily volume is 517,255 shares.
نزل السعر من 24.5 إلى 17.8
آخر سعر 19.71
للمتابعة
"As a result of the complexities associated with accounting for sales transactions in the fourth quarter, our year-end audit has not been sufficiently completed and, accordingly, we are not publishing complete financial results at this time," according to Chief Executive Richard Linden.
Merge said it expects fourth-quarter revenue of $23 million to $26 million. Analysts surveyed by Thomson First Call expect revenue of $35.4 million.
The delay is most likely due to deferred revenue, according to Moors & Cabot analyst Ron Opel.
"Bookings for the quarter were up sequentially, indicating growth," Opel said, but given only part of the revenue will be recorded in the fourth quarter, "that tells me that a lot revenue will instead be recognized over the next several quarters."
"Auditing issues conjure up ethical difficulties, but you don't see any of that content here," Opel said, adding he does have a long position in Merge shares.
Other analysts were concerned acquisitions, such as that of Paris-based medical software company, Axicare, by Merge's Cedara division could be causing lumpiness in the the company's revenue.
According to a Canaccord Adams research note from Feb. 9, analyst Jeff Rath said risks to the company "include the eMed, Merge and core Cedara integrations subsequently facing significant integration challenges which could affect revenue, profitability, business prospects and valuation."
The company is holding a conference call at 10 a.m. ET.
Merge shares recently traded at $20.25, down $4.17, or 16.9%, on volume of 6.9 million shares. Average daily volume is 517,255 shares.
نزل السعر من 24.5 إلى 17.8
آخر سعر 19.71
للمتابعة