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Homestore Says Overstated '01 Revenues By Up to $113 Million

Written by on Wednesday, 20 February 2002 6:00 pm
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Online real-estate site Homestore.com Inc. said today it had overstated revenues by up to 20 percent for 2000 and by up to 32 percent in the first three quarters of 2001.

The company, which last week said it would restate results for the 2000 fiscal year after it concluded an internal accounting inquiry, said in a statement that it had overstated revenues for 2000 by between $39 million and $45 million.

The company said it expects to complete the inquiry and file revised financial statements by mid-March.

Homestore, once lauded by analysts for its continued success even as other Internet companies failed, had reported $230 million in revenue for 2000.

The company also said that the internal inquiry by its own audit committee had determined that online advertising had been overstated by between $76 million to $82 million during the first three quarters of 2001.

Non-advertising revenue, primarily from software and services, was overstated by between $28 million and $31 million over that period, but between $7 million and $23 million of that amount could be recorded as deferred revenue in future periods, the company said.

The total overstatement for the first three quarters of 2001 was as much as $113 million. The company had reported revenue of $350.9 million for those quarters.

A company spokeswoman was not immediately for comment.

Homestore first said in December it would have to restate certain financial results. That news followed the company's early-November report of a net loss and plunging revenues that surprised analysts and raised questions about the strength of its businesses.

In early January, company co-founder and Chief Executive Stuart Wolff resigned, and in mid-January Homestore said it had terminated or accepted resignations from seven employees as part of the accounting probe.

Trading in Homestore shares was halted by Nasdaq on Dec. 21, resumed on Jan. 7, and was halted again on Feb. 13.

The Nasdaq Stock Market® announced today that the trading in HomeStore.com Inc. is scheduled to resume on Friday, February 22, 2001 at 10:00 a.m., Eastern Time.

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