Shares of Impinj (NASDAQ:PI) took a hit on Tuesday, falling as much as 12.4%. The stock finished the trading day down a total of 10.7%.
Impinj's decline comes after the wireless connectivity company reported its fourth-quarter results. While financial results for the quarter were strong, investors may be concerned with Impinj's outlook for a headwind in its systems business in Q2.
Impinj reported fourth-quarter revenue of $40.8 million, up from $34.6 million in the year-ago period. Non-GAAP (adjusted) earnings per share were $0.03, up from a loss of $0.07 in the fourth quarter of 2018. Analysts, on average, were expecting revenue of $38.1 million and earnings to breakeven on a non-GAAP per-share basis.
Looking ahead to 2020, Impinj warned that its North American system project contributed meaningfully to the fourth quarter of 2018 and will contribute to the first quarter of 2020 as well but will "transition from deployment to operations at the end of Q1, with the customer not purchasing additional gateways in Q2 2020." This will result in "a meaningful headwind for our systems business beginning in Q2 2020," said Impinj CFO Cary Baker in the tech company's earnings call.
While Impinj expects a headwind to its systems business beginning in Q2, management is confident in the long-term outlook for the overall business and its systems business specifically.
"We enter 2020 with strong momentum and a solid foundation for our business," commented Impinj CEO Chris Diorio in the company's fourth-quarter earnings release.