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: Shares of DTS (Nasdaq: DTSI ) fell nearly 30% in early trading but recovered more than half of that loss to close down 14.4% for the day. Investors didn't like that second-quarter results came in below expectations.
So what: Revenue rose 18% to $20.6 million, resulting in an adjusted profit of $0.24 a share. Analysts had been calling for $21.8 million and $0.25 a share, respectively.
Now what: Guidance may have spooked investors most. Management now expects the company, whose audio-encoding technology competes with similar tech from Dolby (NYSE: DLB ) , to book $1.30 to $1.42 in full-year profit on $95 million to $100 million in revenue. Wall Street had expected the company to end 2011 with a $1.48 a share profit on $103.9 million in revenue. Do the size of these misses justify the selloff? You tell me. Weigh in using the comments box below.
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