The company announced it expects to receive notice of a delisting from Nasdaq because it missed the deadline for filing its most recent quarterly report.

InformationWeek Staff, Contributor

August 11, 2006

2 Min Read

Juniper Networks confirmed that it will need to restate past financial results after an internal audit found problems with the way the company accounted for stock option grants.

Juniper said in a statement Thursday that it must restate historical financial statements to record additional charges for stock-based compensation expenses. The Sunnyvale, Calif.-based networking company hasn't yet determined the amount of the charges or the specific periods it needs to restate.

In addition, Juniper said it expects to receive notice of a delisting from the Nasdaq stock exchange because it missed the deadline for filing its most recent quarterly report.

Juniper Chairman and CEO Scott Kriens delayed financial results July 19 and disclosed that an ongoing investigation by the audit committee of the networking vendor's board had preliminarily concluded that the recorded grant dates of certain stock-option grants differed from the actual measurement dates that should have been used for accounting purposes.

At that time, Juniper said it wasn't sure if the impact would be material or if financial changes would be necessary. The company on Thursday notified regulators that reported results going back to Jan. 1, 2003, aren't reliable.

The company said it is "committed to resolving these issues as expeditiously as possible and to file its Form 10-Q and restated financial statements as soon as practicable following completion of the independent investigation."

Juniper is one of several public companies sorting through accounting irregularities relating to stock option grants. Apple on Friday said it would delay its third-quarter results as it reviews stock-option grants.

The U.S. Securities and Exchange Commission is investigating more than 80 companies for accounting problems related to the backdating of stock options.

Juniper rival Cisco Systems earlier this week asserted that its accounting practices relating to stock-option grants are sound.

"Given the recent attention to this issue, Cisco thoroughly reviewed its issuance of stock option grants, and I can say with confidence that we did not change stock-option grant dates to give employees a lower exercise price. ... We stand behind all of our financial statements as we reported," Cisco CFO Dennis Powell said in a conference call with financial analysts to discuss the San Jose, Calif., company's fourth-quarter results.

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