What happened?

Shares of Quotient Technology (NYSE:QUOT), a leading digital promotions, media, and analytics company that delivers digital advertisements and coupons to millions of consumers, are down 16% Wednesday as of 12:22 p.m. EST after the company announced weaker-than-expected preliminary fourth-quarter 2018 results.

So what

Management reported preliminary unaudited results that had fourth-quarter revenue between $106.5 million and $107.5 million, lower than its previously announced guidance range between $115.0 million and $120.0 million. Making matters worse, this top-line loss will filter down and negatively impact its net loss. It was also enough to drag down full-year results: Management now expects full-year 2018 revenue in the range of $386.5 million to $387.5 million, compared to the prior guidance range between $395.0 million and $400.0 million.

Woman on phone looking at digital coupon advertising.

Image source: Getty Images.

"These preliminary results imply a revenue growth rate of approximately 20% for the full year 2018 over 2017, an increase over the 17% growth rate for the full year 2017 over 2016," said Mir Aamir, president and CEO of Quotient, in a press release.

Now what

The weaker results stemmed from a number of customers cutting their spending in December, hurting Quotient Technology's promotion revenue more than anticipated. While media revenue still increased, compared to the prior year, it was also negatively impacted by the spending cuts. This preliminary result isn't being received well by investors Wednesday, but management makes a great point in noting that as companies near the end of their quarter and/or fiscal year, advertising spending is one of the easiest expenses to cut in an attempt to boost short-term financial performance.

That said, investors would be wise to keep an eye on whether that trend continues into the first quarter of 2019 before panicking -- also keeping in mind that the company has a history of popping and dropping on quarterly results.

Check out the latest Quotient Technology earnings call transcript.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.