Please ensure Javascript is enabled for purposes of website accessibility

Why Immersion Stock Got Crushed Today

By Evan Niu, CFA - Aug 3, 2018 at 12:43PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Second-quarter results were disappointing but Immersion reaffirmed full-year guidance.

What happened

Shares of Immersion (IMMR 2.70%) got crushed today, down by 23% as of 11:50 a.m. EDT, after the developer of haptic technologies reported second-quarter earnings. An unexpected decline in revenue caught investors off guard.

So what

Revenue in the second quarter fell to $6.1 million, while analysts were expecting sales to increase to $9.6 million. That led to a net loss of $7.8 million, or $0.25 per share. On a non-GAAP basis, Immersion lost $5.4 million, or $0.18 per share. The consensus estimate called for an adjusted net loss of $0.14 per share. The company finished the quarter with $136.7 million in cash and investments on the balance sheet.

Finger point to stock chart on a touchscreen

Image source: Getty Images.

Now what

Immersion signed license agreements with Stanley Electric, Toyodenso, and Calsonic Kansei during the quarter. The company announced a confidential settlement with Fitbit last month, shortly after the close of the second quarter. That suit had been initially filed almost exactly a year prior.

Despite a disappointing second quarter, Immersion reaffirmed its full-year revenue guidance, which is expected in the range of $108 million to $118 million, and should translate into non-GAAP net income of $59 million to $67 million. If Immersion is able to win more suits, its top line could come in better than expected. "Our guidance remains independent of possible additional litigation outcomes currently ongoing in our largest Mobility line of business," CFO Nancy Erba noted.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Immersion Corporation Stock Quote
Immersion Corporation
IMMR
$5.32 (2.70%) $0.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.