Shares of radio-frequency identification solutions provider Impinj (NASDAQ:PI) tumbled on Friday after the company reported preliminary fourth-quarter results. While Impinj expects its fourth-quarter revenue to be slightly above its prior guidance, the company's outlook for the first quarter called for a steep revenue decline. The stock was down about 44.5% at 11:50 a.m. EST.
Impinj expects to report fourth-quarter revenue of between $29.0 million $30.0 million, above its previous guidance of $28.25 million to $29.75 but well below the $33.7 million it reported during the prior-year period. Impinj pointed to strong unit-volume growth in its fixed-reader business as one of the main drivers of the better-than-expected revenue.
This slightly good news was completely drowned out by the company's first-quarter guidance. Impinj expects to produce first-quarter revenue of between $20 million and $22 million, down about 34% year over year at the midpoint. The company said that shortened endpoint IC lead times and reductions in partner inventory have reduced the backlog, leading to the weak guidance despite growth in endpoint consumption and the number of deployments.
Impinj expects its inventory to grow during the first quarter due to weak sales, but the company doesn't expect there to be any meaningful risk of obsolescence.
In separate news, Impinj announced that CFO Evan Fein will step down effective March 30. A boilerplate reason was given by the company.
Impinj has been having revenue issues for the past few quarters. The company slashed its outlook for IC endpoint shipments in August of last year due to a few large customers delaying planned rollouts. During the third-quarter conference call in November, CEO Chris Diorio indicated that the company wasn't entirely sure why volumes were declining: "The reasons aren't completely clear to us, but we do not believe our market share has changed materially."
Impinj's disastrous first-quarter guidance, coupled with the departure of the CFO, may mean there are some deep problems at the company beyond delayed roll-outs. Impinj will report its full fourth-quarter results on Feb. 15. Management has a lot of explaining to do.