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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.
So what: Problems with changes to its sales force, manufacturing, and supply chain are weighing on Accuray's top line much more than expected, reinforcing concerns over the company's turnaround under new CEO Joshua Levine. To help deal with the transitional headaches, however, Accuray also announced plans to cut its work force by 13% -- a move that management said will save roughly $40 million annually.
Now what: Accuray now sees second-quarter revenue of $72 million-$75 million, down from $106.4 million in the year-ago period and also well below the analyst consensus of $93.8 million.
"[W]e are initiating a strategic transformation at Accuray in order to drive consistent performance that is required to create value to our customers and shareholders over the long term," Levine reassured investors. "[We] are establishing a cost structure to support sustainable revenue growth and profitability through commercial execution, service excellence and improved business processes."
So while today's "reset" might frustrate some Accuray bulls, the seemingly short-term setback might be a good chance to buy some long-term growth on the cheap.
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