Why Support.com, Inc. Shares Plunged

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 Support.com,  (NASDAQ: SPRT  )  fell more than 16% during Wednesday's intraday trading after the company announced preliminary fourth-quarter results and initial first-quarter 2014 guidance.

So what: Support.com now expects non-GAAP Q4 revenue in the range of $24.5 million to $25 million, which narrows its previous guidance of $24 million to $26 million. Meanwhile, analysts were modeling Q4 revenue of $25 million.

In addition, Support.com says non-GAAP income from continuing operations are now expected to be in the range of $0.08 per share and $0.09 per share, an increase of its previous guidance of $0.06 to $0.08 per share. Finally, at the end of Q4 the company had cash and equivalents remaining of $72 million, a $3.5 million sequential improvement over Q3.

However, Support.com also stated first-quarter 2014 revenue should be in the range of $16 million to $18 million, or well below expectations for sales of $21.87 million. This, in turn, should translate to non-GAAP income from continuing operations in the range of minus $0.04 per share to $0.00 per share.

Now what: CEO Josh Pickus weighed in, "We can now estimate the effects of program changes at Comcast on our business and want to update shareholders without delay."

That's fair enough, but I can't blame investors for bidding shares down today. Remember, shares of Support.com sank in October after Pickus noted that while changes in Comcast's signature support program shouldn't have a great effect revenue from the cable provider, they would almost certainly result in "considerably lower margins" going forward.

And though he elaborated today with optimism for a "set of new opportunities with Comcast and other industry leaders" in various other industries, I just can't get excited about Support.com stock until those catalysts materialize.

Consider the 9 solid stocks in this free report instead
If Support.com is still too risky for you, you're in luck! Dividend stocks can make you rich. It's as simple as that. While they don't garner the notoriety of high-flying growth stocks, they're also less likely to crash and burn. And over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.


Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

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 12, 2014, at 1:56 PM, Justme4now wrote:

    Wondering if the drop in stocks had anything to do with the massive layoffs Dec 30th of around 150 technicians. Comcast will be the demise of SDC...

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2787964, ~/Articles/ArticleHandler.aspx, 9/22/2014 2:47:33 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement