Shares of Avaya (NYSE:AVYA) fell as much as 12.5% on Wednesday morning, following a mixed fourth-quarter earnings report. The provider of call center and unified communications services had recovered to a 7.9% drop by 10:50 a.m., EST.
Avaya's sales rose 4.4% year over year to $755 million, led by a doubling of cloud-based service revenue but hampered by 14% lower hardware sales. The bottom line swung from a loss of $0.31 per share to earnings of $0.39 per share. Your average analyst had been looking for earnings near $1.20 per share on sales in the vicinity of $734 million.
I'm not surprised to see some investors taking profits off the table today, but don't cry for Avaya's shareholders. The stock is still up 44% in 2020, including Wednesday's sharp correction. The big earnings miss looks more like an analyst error than a problem with Avaya's results, which fell above the high end of management's guidance across the board. It's worth mentioning that the company doesn't offer adjusted earnings figures, which makes the bottom line a bit more prone to unpredictable swings.