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 wireless technologist Sierra Wireless (NASDAQ:SWIR) plunged 10% today after its quarterly results and outlook disappointed Wall Street.
So what: The stock has soared over the past year on better than expected growth, but today's first-quarter results -- adjusted earnings per share of $0.02 missed the consensus by $0.01 despite a revenue increase of 19.5% -- are forcing analysts to scale back their expectations a bit. In fact, gross margin during the quarter declined 100 basis points to 31.9%, suggesting that the company's competitive position is weakening as well.
Now what: Management now sees second-quarter EPS of $0.06-$0.08 on revenue of $128 million-$131 million, versus the consensus of $0.09 and $123.5 million. "I believe we are well positioned for continued revenue growth and improving profitability in the second quarter and beyond," said President and CEO Jason Cohenour in a press release. "We continue to focus on driving profitable organic growth in M2M devices and cloud services, while pursuing additional strategic acquisitions." Given Sierra's rock-solid balance sheet and today's double-digit pullback, the stock's downside might be limited enough to buy into those prospects.
The biggest thing to come out of Silicon Valley in years
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.
Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Sierra Wireless. The Motley Fool owns shares of Sierra Wireless. 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.