Shares of Vasco Data Security International Inc. plummeted Thursday after the company reported first-quarter revenue below Wall Street estimates, leading at least one analyst to downgrade the stock.
In afternoon trading, the stock fell $3.28, or 23.7 percent, to $10.55, near its 52-week low of $10.10 set in early March.
The Oakbrook Terrace, Ill.-based provider of data security products said its quarterly income edged lower to $4.9 million from nearly $5 million in the year-ago period. Earnings per share were flat at 13 cents.
Earnings were in line with analyst estimates according to a Thomson Financial survey, but Vasco's revenue of $28.9 million _ up from $26.4 million the year before _ missed Wall Street's outlook of $32.5 million.
Vasco also reaffirmed its 2008 guidance, but analysts were skeptical that the company could meet it.
Morgan Keegan's Brian Freed downgraded the company to "Market Perform" from "Outperform." He noted it was Vasco's fourth straight quarter of slowing revenue growth.
"We believe the lackluster year-over-year revenue growth combined with management's reaffirmation of full-year revenue and margin targets will drive a continued crisis of confidence among Vasco investors and increase the potential for further downward revisions given the aggressive ramp required in the second half to meet management guidance," Freed wrote in a client note.
Separately, Brean Murray Carret & Co. analyst Andrey Glukhov noted that favorable currency exchange rates added $2 million to Vasco's revenue in the quarter. "In other words year-over-year revenue growth was almost entirely a function of the currency gain," he wrote.
Glukhov also said it was unlikely Vasco could meet its guidance, as the company's year-over-year sales growth would have to accelerate to at least 55 percent by the fourth quarter.
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