Lernout & Hauspie, (Nasdaq: LHSP) fell 25 percent Tuesday as it issued a statement denying charges of inconsistencies in its Korean business reported in Tuesday's Wall Street Journal.
Shares were down 9 3/8 to 27 5/8, in response to an article which said the speech and language technology company had discrepancies in its sales figures for Korea.
Lernout & Hauspie said it believes statements attributed to L&H Korean customers are misquoted or factually incorrect and that other information appearing in the article, including its customer roster, is distorted.
The company cited statements from two of its customers, LG Electronics and Hung Chang Corporation, as being misquoted.
The article, "Tech Firm's Korean Growth Raises Eyebrows," said that some companies L&H identified as Korean customers said they do no business with L&H. An employee of LG Electronics, one of 18 out of 30 customers the newspaper contacted, said LG Electronics never bought products or licenses from L&H. In its statement today, L&H said that LG Electronics and L&H entered into a licensing agreement at the end of 1999 which calls for the integration of L&H's TTS 2500 text-to-speech technology into television sets to be used for language learning.
L&H officials also said the company is pleased with its results in Korea and intends to implement the business structure it has developed there throughout operations worldwide.
The company will announce its second quarter earnings after Tuesday's bell. Analysts are expecting a profit of 3 cents a share. The company topped estimates in its first quarter.