Accounting & Tax

Tommy, EDS Lead Quarterly Filing Delays

Other companies that have announced they won't file their September quarterly results on time include Veritas, Flowserve Corp., and Scientific Lear...
Stephen TaubNovember 5, 2004

Tommy Hilfiger Corp. and Electronic Data Systems are two of what are sure to be a growing number of companies to delay the release of their financial reports. The current period for filing quarterly results ends November 9.

Clothing company Tommy Hilfiger announced that it is delaying the release of its earnings for the second quarter of fiscal 2005 and the filing of its quarterly report, and withdrawing its previously announced guidance for fiscal 2005 per-share earnings. The actions are pending the review by the company of an investigation by the U.S. Attorney’s Office for the Southern District of New York into intracompany commissions for product development, sourcing, production scheduling, quality control, and other services.

Meanwhile, computer services firm Electronic Data Systems postponed the release of its third-quarter earnings report for the second time in a little more than a week. EDS announced that it still is unable to work out the time and the amount of a write-down of a large money-losing contract with the U.S. Navy. The company added that its auditor, KPMG, raised questions regarding quarterly bonus-plan accruals in 2003 and 2004. EDS said the resolution of these issues could result in further revisions to quarterly financial statements in 2003, but it does not believe these issues will affect its reported financial results for the full year.

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In recent weeks, other companies that have announced they won’t file their September quarterly results on time include Veritas, an energy services firm; Flowserve Corp., a maker of flow control equipment; and Scientific Learning Corp., which develops and software that helps build reading skills.

These delays are not unusual. According to corporate governance research firm, Glass Lewis, 36 companies with a market capitalization of more than $100 million postponed reporting their results for the first quarter; 30 delayed their filings in the second quarter. Many of these companies were in the middle of restatements.