Apple to restate earnings

Apple today announced that it has discovered additional evidence of stock grant irregularities--in addition to the previously announced stock grant irregularities that has led to atleast two investor lawsuits. In light of the new evidence, it said will likely need to restate its historical financial statements to record non-cash charges for compensation expense relating to past stock option grants; however, Apple said it has not determined the amount of such charges, the resulting tax and accounting impact, or which periods may require restatement.

Accordingly, Apple on Thursday filed a Form 8-K stating that the financial statements and all earnings and press releases and similar communications relating to periods commencing on September 29, 2002 should therefore not be relied upon. Apple's stock has been climbing on a renewed outlook for the future, hopes of a new iPod nano, and rumored announcements at next week's Worldwide Developer Conference in San Francisco as well several analyst upgrades.

As Apple noted, an internal investigation discovered irregularities related to the issuance of certain stock option grants made between 1997 and 2001. A special committee of Apple’s outside directors has hired independent counsel to perform an investigation. In addition, Apple has informed the SEC. As a result of the ongoing investigation, the company said it will delay the filing of its Form 10-Q for the quarter ended July 1, 2006.

by MacNN Staff