Ongoing financial difficulties dogged ACI Worldwide Inc. last week, overshadowing a new alliance with International Business Machines Corp.
The New York payment-software vendor disclosed it could be delisted from its stock exchange and two analysts cut their ratings.
ACI said in a regulatory filing on Friday that the Nasdaq Stock Market had warned that its stock could be suspended because it was delinquent in filing its annual report. ACI said it would seek a hearing.
The company actually spent most of the year behind on its financial filings, as it reviewed past practices for granting stock options. It caught up in September, filing four quarterly reports in four-and-a-half months, but in November it delayed the report for its Sept. 30 fiscal year to analyze the way it handled its income taxes.
ACI reported preliminary results last week for its fiscal fourth quarter, saying it expects a pretax loss of $10.4 million but could not report net income because of questions about its income taxes. Revenue fell 4%, to $84.7 million.
The company also announced an alliance with IBM, of Armonk, N.Y., under which IBM will help it develop software and provide other services in return for warrants to buy up to 8% of ACI’s shares.
Gil B. Luria, an analyst at Wedbush Morgan Securities, downgraded ACI to “hold” from “buy.”
“We believe the strategic alliance with IBM supports the value of ACI but believe that the contribution from this relationship may only begin to become meaningful in 2009, as the existing business continues to decline,” he wrote in a note to clients.
Thomas McCrohan, an analyst at the investment bank Janney Montgomery Scott LLC, also cut his recommendation, to “neutral” from “buy.”
“Longer term, the story remains compelling, particularly in light of the IBM investment,” he wrote in a note, but he expressed impatience with the company’s financial performance. “We did not expect the drama to spill into 2008.”
