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.
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