Acme Packet Shares Got Crushed: What You Need to Know

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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 Acme Packet (Nasdaq: APKT  ) plummeted 20% on Wednesday after the communications equipment maker slashed its current-quarter forecast.

So what: Acme's fourth-quarter outlook was so weak -- management expects EPS of $0.26-$0.28 versus the consensus of $0.37 -- that analysts are being forced to lower their growth estimates yet again. Naturally, CEO Andy Ory tried to calm investors' nerves, noting that while results were hurt by "uncertainty in the North American service provider market," Acme continues to perform "very well" globally.

Now what: For the full year, Acme now sees revenue of $308-$310 million, which is off from its earlier forecast of $315-$320 million. Of course, with the stock now down a whopping 70% from its April highs, you've got to think that a good chunk of that pessimism is already baked into the price. Trying to catch a "falling knife" isn't easy, but given its still very strong position in the carrier market, Acme might be worth a shot.

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

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of 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 Fool's disclosure policy always gets a perfect score.

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

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 04, 2012, at 12:00 PM, Fleetwood60 wrote:

    "APKT' still has a very strong position in the carrier market and Acme continues to perform "very well" globally as was stated above......THIS WAS A VERY OVER EXAGGERATED MOVE DOWN ON THE NEWS OF "APKT"; as usual the panic has destroyed the price of the stock at the is a good time to begin a buy for a move upward on the stock price of this solid company.

  • Report this Comment On January 04, 2012, at 2:01 PM, Parkite wrote:


    they reduced revenue guidance by ~3% and eps guidance by ~10% for the full year 2011. due to the timing of carrier orders (not competitive reasons). this is a buying opportunity.

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Acme Packet CAPS Rating: ***