Riverbed Technology Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Riverbed Technology (Nasdaq: RVBD  ) dropped 24% in intraday trading today after issuing a disappointing earnings report and outlook.

So what: Second-quarter EPS of $0.21 met the consensus estimate and increased 62% year over year. Revenue grew 35% but fell short of consensus forecasts.

Now what: Management blamed the disappointing revenue on weakness in European markets due to both the economy and the company's execution. It announced new sales management in the region last week and expressed optimism that the new management would fare better. The company's expectations for profit in the current quarter were below the consensus estimate, at least partially due to expenses associated with two acquisitions announced last night. At least four analysts cut their price target on the stock.

Interested in more info on RVBD? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (2) | Recommend This Article (9)

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  • Report this Comment On July 20, 2011, at 2:45 PM, ValueFoolToo wrote:

    Riverbed still looks to be a solid company but the numbers. The two acquisitions announced will assist them in consolidating their position in the "cloud computing" infrastructure. A buying opportunity like this is not handed to us very often and I for one added to my previous position this morning.

  • Report this Comment On July 20, 2011, at 5:54 PM, cooloneba wrote:

    I've been watching RVBD for awhile now and I've been beating myself up for not getting in around $32 4-5 weeks ago... I guess I can get in now!! I took a casual look at the chart for the last year, and it seems like there are bubbles that usually peak between quarterly reports. The most recent quarter had a "double bubble" but the previous three had growth in the first half of the quarter, and then a reduction in the second half. I've never really seen this before, so is it normal, or is there something about RVBD that is making this happen?

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