What happened

Shares of Sierra Wireless Inc. (NASDAQ:SWIR) were down 15.9% as of 12:00 p.m. EST Friday after the Internet of Things (IoT) company announced strong fourth-quarter 2017 results, but followed them with weaker-than-expected guidance.

More specifically on the former, quarterly revenue climbed 12.6% year over year to $183.5 million, which translated to adjusted net income of $9.2 million, or $0.28 per diluted share. Both figures compared favorably to the guidance Sierra Wireless provided last quarter, which called for revenue of $172 million to $180 million, and adjusted earnings per share of $0.21 to $0.29.

Sierra Wireless logo

IMAGE SOURCE: SIERRA WIRELESS

So what

On a segment basis, Sierra Wireless' core OEM Solutions revenue climbed 3.4% year over year to $135.2 million; enterprise solutions sales grew 52% to $31.8 million, and IoT services revenue -- formerly called cloud and connectivity services -- jumped 73.5% to $11.9 million.  The latter included $3.1 million in revenue from Sierra Wireless' acquisition of Numerex, which was completed in early December.

Now what

For the first quarter, however, Sierra Wireless expects revenue in the range of $181 million to $189 million, which should translate to adjusted earnings per share of $0.04 to $0.10. By comparison -- and though we don't usually pay close attention to Wall Street's near-term demands -- consensus estimates predicted first-quarter adjusted earnings of $0.20 per share on revenue near the high end of Sierra Wireless' guidance range.

To be fair, Sierra Wireless noted these results will be negatively impacted by unusual, mostly non-recurring items, including higher costs related to a Numerex network upgrade, as well as customer migration costs and tight component supply constraints.

In the end, shareholders can take solace in the fact that these acquisition-related headwinds should only affect Sierra Wireless' near-term results, and are not indicative of problems in the underlying business. But the stock market hates being told to effectively hurry up and wait, so it's no surprise to see shares pulling back today.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Sierra Wireless. The Motley Fool has a disclosure policy.