What happened

Shares of ORBCOMM (NASDAQ:ORBC) have plunged today, down by 19% as of 12:20 p.m. EDT, after the company reported third-quarter earnings results. The maker of industrial Internet of Things technology missed on both the top and bottom lines.

So what

Total revenue in the third quarter declined to $69.2 million, shy of the consensus estimate of $71.4 million. That translated into a net loss of $4 million, or $0.05 per share, $0.01 worse than the $0.04 per share in adjusted losses that the market was expecting. Adjusted EBITDA was $16.9 million in the third quarter.

Man wearing hard hat and fluorescent yellow vest holding laptop and looking at various projected Internet of Things icons

Image source: Getty Images.

"In the third quarter we continued to ship greater quantities of the new cost-reduced, feature-rich products and made great progress in significantly raising Product Margin and Service Margin, increasing cash flow from operations," CEO Marc Eisenberg said in a statement. "We have several high-profile opportunities across our markets that are starting to fall in line, and I'm confident that we'll be able to build on this momentum, setting the stage for a strong start to 2020."

Now what

In terms of guidance, ORBCOMM expects revenue in the fourth quarter to be in the range of $68 million to $72 million, which is lower than the company had expected. ORBCOMM in July guided revenue in the second half of 2019 to $145 million to $155 million. The company attributed the shortfall to "the slowdown in the North American transportation market," as well as its ongoing shift to a subscription model that recognizes revenue over time. Adjusted EBITDA margin in the fourth quarter should be around 24%.

ORBCOMM also issued preliminary guidance for 2020, expecting product revenue to grow 10% to 15% next year. Recurring service revenue is forecast to grow "at low single digits to start 2020" before rising to "high single digit growth" in the back half of the year.

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.