Sonic Solutions continues to tumble on FY Q1 results
Shares of Sonic Solutions (Nasdaq: SNIC) are tumbling today after the digital media software company reported preliminary sales for its fiscal first quarter below expectations late Thursday.
For the three months ended June 30, net revenue was $29.5 million, while seven analysts polled by Thomson Financial forecast sales of $33.8 million. Last year, the company racked in sales of $36.89 million.
Sonic reported only selected preliminary results, including revenue recognition, because it is still in the process of sorting out a voluntary review of its historical and current stock option grant practices and related accounting previously announced in February.
The company thus far has determined that it lacks sufficient documentation for certain historical option grants and that the measurement dates of these option grants will need adjustment.
Further, the company disclosed that based on its voluntary stock option review, annual and interim financial statements may no longer be reliable.
Sonic said it believes it will have to record additional cash and non-cash charges for stock-based compensation expense and restate previous financial statements, and that such charges will be material.
For the second fiscal quarter ending September 30, the company is forecasting net revenue on a GAAP basis, will be between $30 million and $33 million.
Today, Soleil Securities cut its rating on Sonic Solutions to "Hold" from "Buy."
Shares of Sonic Solutions toppled $2.60, or 25%, to close at $7.80 on Friday.
