Telecommunications equipment company Infinera Corporation shares plummeted today. On August 4, as of 1:13 p.m. EDT, the company’s shares were down 16.8%.
What Does This Mean?
Before we get into any numbers, let’s try to figure out the reasons for the decrease. After analysis, it seems the number one reason for why shares fell today was because Infinera (NASDAQ:$INFN) posted mixed quarterly results and disappointing guidance.
Let’s look at some of the key stats from the Q2 report:
- Revenue dropped 32% to $176.8 million. This number might be bad in absolute terms, but it did land within management’s guidance range. That said, it was below what Wall Street had expected ($181 million)
- Adjusted non-GAAP gross margin came in at 40.7%. It’s worth mentioning that this number was down from the 2016 period
- For the quarter, the non-GAAP net loss was $22.8 million ($0.15 per share). Interestingly, this was at the low end of management’s guidance range, but $0.01 better than what market watchers had forecasted
The majority of the quarterly results were mixed, but investors seem to be focusing on the company’s guidance for the upcoming quarter. And their reactions have not been positive.
- Revenue between the range of $185 million and $195 million
- Non-GAAP gross margin between the range of 37% and 41%
- Non-GAAP between $0.14 to $0.18 per share loss
For the upcoming quarter, Wall Street was forecasting that Infinera would bring in $196.8 million in revenue and a non-GAAP loss of $0.11 per share.
When considering the mixed quarterly results and dismal guidance, it’s understandable to hear that Infinera shares are tanking today.
What Does The Future Hold?
In response to the disappointing guidance, CEO Tom Fallon tried to bring investors attention to their recently launched products, hoping that this would build excitement around the future of Infinera.
“As we continue to deliver on a suite of new products over the upcoming quarters, I believe we are well positioned to grow market share and to gradually improve our financial performance.”
Featured Image: depositphotos/Thomaspajot
