Shares of computer networking stock Arista Networks (NYSE:ANET) took a hit on Friday, sinking 24.2% by the time the market closed.
The stock pulled back despite solid third-quarter results. The culprit for bearishness toward the stock on Friday was management's guidance for the fourth quarter.
Arista Networks reported revenue of $654 million, up 7.6% year over year. Adjusted earnings per share for the tech stock were $2.69, up from $2.11 in the year-ago period.
"In Q3 2019 we continued to see the adoption of our cloud networking technology in more diverse environments," said Arista CEO Jayshree Ullal in the earnings release. But Ullal said the company expects "a sudden softening in Q4 with a specific cloud titan customer..."
Analysts believe the "cloud titan" is Facebook. In Arista's earnings call,
"Naturally, this type of volatility brings a sudden and severe impact to our Q4 guidance," said Ullal during the call.
Arista guided for fourth-quarter revenue between $540 million and $560 million. Analysts were expecting revenue during the period to be $686 million.