UTStarcom faces delisting

UTStarcom today said it has received notice from the NASDAQ stock market that its stock will be listed from the exchange next week due to delays in filing its 2005 earnings report with the U.S. Securities and Exchange Commission.

The delisting would be the latest in a series of financial troubles UTStarcom has faced since the company revealed last fall it was the subject an SEC inquiry. More details came to light when UTStarcom initiated its own investigation in February, revealing the controversy over the premature recognition of revenues from an unnamed Indian customer between 2003 and 2005.

In its last financial statement for the third quarter, UTStarcom posted a $402.7 million loss and it laid off 500 employees. On Monday the company said it is waiting for its independent audit to conclude before filing its year-end financial report (known as a 10-K). It expects the report to be ready on April 30, but the delay is too long for NASDAQ. The exchange said unless UTStarcom has its statement in by March 29, it will delist the ticker symbol UTSI. UTStarcom plans, however, to request a hearing with NASDAQ to challenge the delisting. The request will delay the delisting until a NASDAQ panel decides on the request, but there is no guarantee that the decision will be overturned.