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Investing.com -- PACS Group Inc (NYSE:PACS) stock surged 20.7% after the company announced that an independent audit committee investigation found "no basis to question the integrity" of its top executives.
The healthcare services provider is in the process of restating its financial statements for the first and second quarters of 2024 due to revenue recognition issues related to Medicare Part B billing for respiratory and certain therapy services. The company preliminarily estimates it overstated revenue by approximately $15-17 million for the first quarter and $46-48 million for the second quarter of 2024.
Despite these accounting concerns, investors appeared relieved by the audit committee’s findings regarding the company’s leadership team. The investigation, which is nearing completion, has not uncovered any integrity issues with PACS Group’s Executive Vice Chairman, Chief Executive Officer, Chief Financial Officer, or Chief Accounting Officer.
The company is working to file its restated financial statements and delinquent quarterly and annual reports before September 2, 2025, the deadline set by the New York Stock Exchange for PACS to regain compliance with listing standards.
In response to these developments, PACS Group has appointed a new Interim Chief Compliance Officer and is implementing additional measures to enhance its regulatory compliance program. The company continues to assess the impact of the restatements on its internal controls over financial reporting and disclosure procedures.
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