David R. Baker (Bloomberg) -- Bloom Energy Corp. will restate nearly four years of earnings after reporting an accounting error that boosted revenues for one of the fuel-cell company’s services. The shares plunged.
Correcting the error, which the company said was not the result of misconduct, will lower Bloom’s total revenue for the period less than 10%, according to a statement Wednesday. It will also increase the company’s net loss by $55 million to $75 million for the same period, which stretches from the first quarter of 2016 through the third quarter of 2019.
“We are committed to upholding the highest standards of oversight and compliance,” John Doerr, Bloom’s lead independent director, said in the statement.
Bloom’s stock plunged as much as 24% Thursday before the start of regular trading. The company plans to release its full-year 2019 results on or before March 16.
The error involved Bloom’s “managed services” program, one of several ways the company sells its electricity-generating fuel cells. Under the program, Bloom sells fuel cells to banks and enters into service agreements with customers that use the power. The customer pays the bank a fixed fee and pays Bloom for operations and maintenance.
Bloom initially reviewed the program with PricewaterhouseCoopers LLP, and together, they determined it was appropriate to treat the majority of the service agreements as sales, Bloom said Wednesday in a federal filing. Then last December, the accounting firm questioned whether the agreements should be treated as leases under the terms of the program.
“The accounting error did not result from a change in the accounting literature for leases during the relevant time period or from any override of controls or from any misconduct,” Bloom said in a federal filing.