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Veritas Revises Balance Sheet

Veritas Software Corp. (Nasdaq: VRTS) said it will restate earnings for 2000 and 2001 by a combined total of $20 million after reviewing transactions with AOL Time Warner Inc. (NYSE: AOL) (see Veritas Restates Results).

In November 2002, Veritas disclosed that the Securities and Exchange Commission (SEC) had launched an investigation into the AOL transactions, which involved Veritas swapping software and services in return for advertising on AOL (see SEC Probes Veritas-AOL Deal).

Analysts note that Veritas's restatement is minor, and that it had been expected. Nevertheless, any financial do-over isn't a positive development, says Sabrina Ricci, an analyst with Deutsche Bank AG.

"It doesn't impact results much, but combined with a few other things recently, it's another layer of worry," she says.

Ricci points to the recent departure of Veritas's head of sales, Paul Sallaberry, as well as the fact that last week Parametric Technology Corp. (PTC), a developer of software for the manufacturing industry, said it will restate its earnings for the past three years, due to problems in booking revenues. Former Parametric CFO Edwin Gillis left that company in November 2002 to become Veritas's CFO (see Veritas EVP of Sales Steps Down and Veritas Appoints CFO).

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