Riverbed Technology (RVBD) stock
took a major hit on Friday, dropping 29% to $19.85 following their earnings
announcement on Thursday. This
was close to their 52-week low of $19.48
in October. Riverbed Technology’s 52-week
peak was around $41 in July 2011.
This tumble was the most for Riverbed
most since its market debut five years ago. As part of the earnings announcement, Riverbed lowered their forecast
for 2012 sales growth, citing the effect of new product introductions.
“The combination of our product
transition and a seasonally weaker quarter was challenging,” President and CEO
Jerry Kennelly, said on a conference call.
“We continue to feel the
unavoidable growing pains associated with becoming a multiproduct company.”
Riverbed announced their Q1 results
on Thursday. “In a seasonally difficult
quarter, we completed a major product cycle and achieved results within our
guidance range,” stated Kennelly. Their
Q1 revenue of $182 million was 12% greater year over year. Their net income dropped from $13 million to
$7 million, not an auspicious way to start the fiscal year.
Riverbed is in the Leaders section of the January 2011 Gartner Magic Quadrant for WAN
Optimization Controllers. They rank higher that the other two companies in the Leaders section, for both Ability to Execute and Completeness of Vision. Blue Coat
Systems and Silver Peak Systems are the other two companies in this portion of the quadrant.
Nonetheless, analysts were not kind
to Riverbed on Friday following the earnings announcement. The stock received seven downgrades, from Mizuho, JP Morgan, Wedbush Securities,
Capstone, Cantor, Oppenheimer, and RBC Capital.
Riverbed may be dealing with some
further financial rapids in Q2.
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