Bottomline stock tumbles after earnings report
Portsmouth-based Bottomline Technologies’ earnings drop due to an accounting change apparently did not please investors.
The stock took a nosedive the morning after earnings were announced, declining at one point by as much as 20 percent.
The Portsmouth provider of accounting software reported net income of $147,000, or a penny a share, during the first quarter of its fiscal year (which ended Sept. 30), down from $679,000, or 4 cents a share, a year earlier.
The main reason for the drop in income is that some $1.7 million of stock options due its top executives have been counted as an expense. If those options weren’t counted, the company would actually have increased its earnings $1.1 million.
The company had earlier that its two top executives had received slightly less than a 30 percent raise. (NHBR Daily, Oct. 25). Their stock options were alone worth $1.5 million, according to the filings.
Accountants – under pressure from regulators – are increasingly requiring stock options as an expense, however these changes have not been good for the bottom line. The company, however, urged investors to pay attention to the non-accounting measures “because it allows for an evaluation of the company with a focus on the performance of its core operations.”
Investors however were not pleased. The stock, which closed Thursday at $15.62, had fallen to about $12.50 a share at the close of trading on Tuesday. – BOB SANDERS