Acme Packet 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: Shares of telecommunications infrastructure provider Acme Packet (Nasdaq: APKT  ) have plunged by as much as 16.5% today after the company announced its third quarter results would be lower than expected.

So what: The official earnings release isn't scheduled until later this month, but the company has a pretty good idea of what to expect at this juncture. Revenue will be approximately $70 million and non-GAAP earnings per share between $0.20 and $0.22. These figures are lower than the $82.8 million revenue and $0.30 earnings that analysts were looking for.

Now what: The softness is related to a large order from AT&T (NYSE: T  ) that is being delayed until next quarter. Acme Packet scored the order but won't book the revenue until next quarter, and the company has reaffirmed its full-year outlook. This is a legitimate market overreaction and the sell-off isn't justified. This Fool still likes Acme Packet's exposure to the migration to 4G LTE networks and the win with AT&T only validates the strength of its session border controllers.

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

Fool contributor Evan Niu owns shares of AT&T, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of AT&T and Acme Packet. Try any of our Foolish newsletter services free for 30 days. 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.


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