Shares of Infinera (INFN -2.25%) slid Thursday after the networking specialist offered weak guidance in its third-quarter earnings report. The stock closed the day down 14%.
The company behind the Intelligent Transport Network said adjusted per-share profit fell from $0.22 a year ago to $0.05 on breakeven expectations, and revenue dropped 20% to $185.5 million, missing the consensus estimate of $196.3 million.
"As expected, weak demand across much of our business during the third quarter led to financial results that were below our standards," said CEO Tom Fallon. "While the revenue environment is likely to remain challenging in the near term, we are making continued progress toward delivering our next generation of products and increasing the cadence in which we will introduce step function technology improvements."
Thursday marked the third time in a row that Infinera stock had sold off sharply following earnings, as the company's turnaround seems to be taking longer than many had expected. The stock is now down more than 50% over the past year.
On the earnings call, management provided downbeat guidance for the current quarter, calling for a loss of $0.14 per share on revenue of $175 million. Analysts had expected a loss of $0.11 per share on revenue of $177 million.
CFO Brad Feller said that many of the company's customers had delayed purchases until next year as their annual budgets have already been exhausted.
Infinera stock held steady through the morning, but fell in the afternoon on news of a possible merger between Level 3 Communications (LVLT) and CenturyLink (LUMN -1.51%), which are two of the its biggest customers. Investors seem to suspect that such a tie-up could make the two companies a tougher negotiating partner for Infinera, adding to its woes as the stock searches for a bottom.