Image source: Sierra Wireless.

What: Shares of Sierra Wireless Inc. (NASDAQ:SWIR) were down 18.1% as of 11:30 a.m. EDT Friday after the Internet of Things pure play reported solid second-quarter 2016 results, but followed with light guidance.

So what: Quarterly revenue declined 1.1% year over year, to $156.2 million. This included a 4% drop in OEM solutions sales, to $132.6 million; 10% growth in enterprise solutions revenue, to $16.6 million; and a 46.8% gain in cloud and connectivity services, to $7 million. Based on generally accepted accounting principles (GAAP), that translated to net income of $0.7 million, of $0.02 per share, down from net income of $4.1 million, or $0.12 per share in the same year-ago period. On an adjusted (non-GAAP) basis, net income fell 25.6% year over year, to $6.4 million, or $0.20 per diluted share.

Of course, these results might not sound particularly encouraging. But as I pointed out in my earnings preview earlier this week, Sierra Wireless' guidance called for quarterly revenue in the range of $150 million to $160 million, and adjusted earnings per share of $0.09 to $0.17 -- which means Sierra Wireless' second quarter was actually stronger than expected.

Now what: With the caveat that Sierra Wireless continues to believe it's "well positioned to drive strong long-term growth," the company opted to take a more cautious view over the short term. 

"While we expect to see continued solid revenue contributions from new OEM programs," Sierra Wireless' press release explains, "we are seeing signs of softer short term demand and tighter inventory management with some established OEM customers and programs."

As such, for the current (third) quarter, Sierra Wireless anticipates revenue of $145 million to $155 million, and adjusted earnings per share in the range of $0.06 to $0.13. Furthermore, for the fourth quarter, Sierra Wireless still expects to see sequential and year-over-year growth as dictated by previous guidance, but "not to the levels previously anticipated."

For the full-year 2016, then, Sierra Wireless now expects revenue and adjusted earnings per share to be at the low end of its previous guidance, which called for revenue of $630 million to $670 million, and adjusted earnings per share of $0.60 to $0.90.

So in the end, while I'm convinced long-term investors should be happy with Sierra Wireless' direction, it's no surprise to see shares trading lower in light of this cautious guidance.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.