Why Acme Packet Got Crushed

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  ) got crushed today, down by as much as 18% today, after the company reported disappointing earnings, swinging to a loss.

So what: Revenue in the second quarter declined 15% to $67.6 million, and the bottom line changed from black ink to a light shade of red. Acme Packet posted a net loss of $127 million, which rounds to $0.00 per share, much worse than the $14 million in profit a year ago.

Now what: These figures were mostly expected, as Acme Packet gave a warning a couple weeks ago on what to expect this quarter. However, the new information today is that the company is also cutting full-year outlook, and now expects revenue between $270 million and $275 million, which should result in a GAAP net loss of $0.07 to $0.11 per share. On an adjusted basis, it expects earnings per share of $0.43 to $0.47, which still doesn’t compare to the Street’s forecasts.

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

Fool contributor Evan Niuholds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Acme Packet. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days


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