NQ Mobile Inc (ADR) (NYSE:NQ) reported its fourth quarter and full year 2013 results late Thursday. The Chinese mobile security company’s earnings surprisingly slipped by a penny compared to the previous year. For the fourth quarter, NQ Mobile reported earnings of 22 cents, missing the consensus estimate of 32 cents. The company had earned 23 cents in the same period last year.

NQ Mobile

NQ Mobile posts full-year GAAP loss of 5 cents

However, fourth quarter revenues surged 126% YoY to $67.9 million, topping Wall Street expectations of $62.8 million. For the full year 2013, NQ Mobile Inc (ADR) (NYSE:NQ) reported revenues of $196.7 million, up 114.3% from the previous year. The Beijing-headquartered company said it expects current quarter revenues between $75 million and $76 million, well above the consensus estimates of $65.5 million. The company forecasts revenues in the range of $320-$325 million for the full year 2014.

NQ Mobile Inc (ADR) (NYSE:NQ) ended the fourth quarter with $179.7 million in cash and cash equivalents, up from $34.3 million in Q3. The Chinese company’s balance sheet has $175.4 million of convertible debt. However, the biggest surprise was an accounting error that could put NQ Mobile on the defensive. The company said its fiscal third quarter results had some error due to “overstatement” of stock-based compensation. As a result, the company revised its GAAP loss in Q3. After fixing the error, NQ Mobile said it suffered a full year GAAP loss of 5 cents a share, compared to the Wall Street expectations of 17 cents a share in profits.

NQ Mobile yet to release the audit committee’s report

The accounting error raises a number of questions about its business practices. In October 2013, short seller Muddy Waters published a research report calling NQ Mobile Inc (ADR) (NYSE:NQ)’s business “fictitious.” The short seller alleged that the company deceives its investors. The Carson Block-run Muddy Waters said NQ Mobile wasn’t transparent about its cash holdings and sales. Things appear only on paper.

In response, NQ Mobile Inc (ADR) (NYSE:NQ) formed an independent audit committee to investigate the claims made by Muddy Waters. The company hasn’t yet issued findings of the investigations.

NQ Mobile Inc (ADR) (NYSE:NQ) shares plunged 13.45% to $13.84 at 12:51 PM EDT on Friday.