Shares of Electronics for Imaging Inc. (NASDAQ:EFII) dropped 13.2% Friday, after the digital-printing company announced disappointing first-quarter 2017 results.
Quarterly revenue fell 2% year over year, to $228.7 million and translated to adjusted net income of $25.8 million, or $0.55 per diluted share -- the latter of which was bolstered by EFI's decision to repurchase 300,000 shares for roughly $17 million during the quarter. Analysts, on average, were anticipating roughly the same per-share earnings on higher revenue of $239.2 million.
"We are pleased that our financial discipline allowed EFI to achieve the midpoint of our non-GAAP EPS outlook despite a slow start to the year," CEO Guy Gecht elaborated. "To address the challenges we faced in Q1, we are taking steps to better execute on our pipeline, while further leveraging the solid growth in the textile printing business, the start of the Nozomi beta rollout, and our new product introductions in the back half of the year."
During the subsequent conference call, EFI told investors it expects adjusted earnings in the second quarter in the range of $0.54 to $0.60, assuming this month's foreign exchange rates remain flat for the remainder of the quarter. By comparison, Wall Street was modeling higher second-quarter earnings of $0.63 per share.
Though EFI technically remains on track to meet its earnings goal for the year, this was a fairly cut-and-dried case of falling short of expectations to start 2017, and then following with underwhelming earnings guidance. As a result, with shares of EFO up more than 15% year to date going into this report, it's no surprise to see investors taking a step back today. n