What happened
Shares of Switch (SWCH) have plunged today, down by 18% as of 11:30 a.m. EST, after the company reported third-quarter earnings results. The data center infrastructure specialist broke even when investors were expecting profitability.
So what
Revenue in the third quarter rose to $102.8 million, which led to net income attributable to Switch of just $6,000, or $0.00 per share. Analysts had been modeling for $102.7 million in sales and a profit of $0.03 per share. Switch signed over $39 million in annualized recurring charges during the quarter, and posted operating income of $12.5 million. Adjusted EBITDA was $50.9 million, and capital expenditures were $60.4 million.
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Switch had announced a $150 million stock repurchase program in August, and bought back $60.6 million worth of stock during the third quarter. The company also announced a quarterly dividend of $0.0147 per share, payable on Dec. 6, 2018 to shareholders of record as of Nov. 26, 2018.
Now what
"In the first year as a public company, Switch continued to establish the Switch PRIME campus locations as hyperscale technology infrastructure ecosystems, competitively positioned to support strategic enterprise deployments," CEO Rob Roy said in a statement. "We firmly believe that we are well aligned with industry dynamics, and uniquely positioned to jump start enterprise migration into a hybrid cloud environment."
In terms of guidance, Switch's outlook for the full year remains unchanged, after lowering it in August. Total revenue for 2018 should still be $405 million to $408 million, with adjusted EBITDA of $197 million to $200 million. Capital expenditures for the year are forecast in the range of $260 million to $310 million.
