GN Shares Drop as Headset Sales Fall, Accounting Fraud Detected

GN Store Nord A/S fell the most in four years in Copenhagen trading after the headset unit reported shrinking sales, the company cut its revenue forecast and the hearing aid division was hit by accounting fraud.

GN sank 8.7 percent to 128.60 kroner at 10:45 a.m., giving the company a market value of 20.8 billion kroner ($3.1 billion). The shares plunged as much as 12 percent, the most since Aug. 11, 2011. The decline made the stock today’s biggest loser in the Stoxx Europe 600 Index.

Sales will rise 6 percent to 7 percent this year, down from a forecast of more than 8 percent previously, because of weakness in the Bluetooth headset market, GN said Thursday in a statement. Sales at GN Netcom, the unit that makes the Jabra wireless headsets, shrank 2 percent in the second quarter measured on organic terms.

“The mobile business was a particular weak spot,” Lisa Bedell Clive, an analyst at Sanford C. Bernstein Ltd., said in a note.

GN also said an executive at its Beltone distribution network in the U.S. is accused of accounting fraud, leading it to book a 150 million-krone loss in its GN ReSound unit. The executive, who wasn’t identified, has been dismissed and the matter is under investigation, GN said.

According to Bernstein’s Clive, Beltone accounts for 17 percent of the GN ReSound unit’s revenue.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE