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Why Active Network Shares Got Sliced Nearly in Half

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 Active Network (NYSE: ACTV  ) got sliced nearly in half today, down by 46% at the low, after the company reported earnings.

So what: Third-quarter revenue came in at $109.2 million, slightly below expectations. Earnings per share came in at $0.05, just above the $0.04 consensus estimate. However, the real culprit to the crash was Active Network's outlook.

Now what: Fourth-quarter revenue should be in the range of $93 million to $97 million. That was only marginally below forecasts, but fiscal 2013 was way short. Next fiscal year is expected to see revenue of $470 million to $480 million, but investors were expecting it to clear at least $500 million. A number of analysts have downgraded the stock today as a result, including Raymond James, Northland Securities, and Barrington Research, further adding to the downside pressure.

Interested in more info on The Active Network? Add it to your watchlist by clicking here.

Evan Niu, CFA, has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Active Network. 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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  • Report this Comment On November 02, 2012, at 4:27 PM, spirts wrote:

    Hey ol Motley, left this one out...

    Active Network Inc (NYSE:ACTV) target has been lowered by RBC Capital following the company’s reduced 2012 guidance and provided 2013 guidance far lower than consensus estimates. The firm predicts that the stock may be somewhat range-bound for some time, although it thinks that the shares have the possibility to be somewhat oversold. The firm keeps its Outperform rating on the stock

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Related Tickers

12/31/1969 7:00 PM
ACTV.DL $0.00 Down +0.00 +0.00%
The Active Network CAPS Rating: **