What happened
Shares of AmTrust Financial Services, Inc. (AFSI) are soaring by nearly 21% as of 12 p.m. EDT on Tuesday after the company filed its annual report for 2016, which included restated financial statements for earlier reporting periods.
So what
Previously, AmTrust Financial Services plunged almost 20% in March when the company disclosed that its reported financials contained material errors, and that some of its filings should "no longer be relied on" because of those errors.
Image source: Getty Images.
The revised financials in its new annual report for 2016 show a double-digit negative adjustment to diluted earnings per share (EPS) during two of the three most recent years.
|
Item/Year |
2015 |
2014 |
2013 |
|---|---|---|---|
|
Diluted EPS as reported |
$2.80 |
$2.72 |
$1.78 |
|
Restated diluted EPS |
$2.49 |
$2.53 |
$1.54 |
|
Change |
(11%) |
(7%) |
(14%) |
Data source: SEC filings with calculations by author.
Now what
Despite its filing and rising share price, AmTrust hasn't yet put this issue behind it. The 2016 annual report cautions that management identified certain material weaknesses in its controls over financial reporting for the year ended 2016, and that "internal control over financial reporting was not effective as of December 31, 2015."
That said, the filing did clear up more topical issues. The company is now current on Nasdaq and NYSE listing requirements, and its 2016 financials reported in its earnings release in February match with its annual report filed today.
