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Why Ribbon Communications Stock Plummeted Today

By Evan Niu, CFA - Feb 18, 2021 at 12:43PM

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The networking software company reports fourth-quarter results.

What happened

Shares of Ribbon Communications (RBBN -5.27%) plummeted by as much as 15% today after the company reported fourth-quarter earnings. The results were mixed relative to analyst expectations. As of 12 p.m. EST, the stock had pared some losses but was still down 8%.

So what

Revenue in the fourth quarter was $244 million, a modest miss compared to the consensus estimate of $246.4 million in sales. That resulted in adjusted net income of $27 million, or $0.18 per share, which beat the Street's forecast of $0.14 per share in adjusted profits. The networking software technology company finished the year with $136 million in cash.

Red stock chart going down

Image source: Getty Images.

"We are very pleased with our fourth quarter results, in particular our second consecutive quarter of record adjusted EBITDA as we benefited from strong sales and gross margins, along with efficiencies in operating expense," CEO Bruce McClelland said in a statement. "We are excited to carry this momentum forward in 2021 as we continue to focus on growing our IP Optical sales and improving overall profitability."

Now what

In terms of guidance for the first quarter, Ribbon expects revenue to be in the range of $190 million to $200 million, the midpoint of which is slightly below the consensus estimate of $196.6 million. That should result in adjusted earnings per share of $0.01 to $0.03, mostly on target with Wall Street's forecast of $0.02 per share. The outlook assumes that market conditions related to the COVID-19 pandemic do not worsen.

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Ribbon Communications Inc. Stock Quote
Ribbon Communications Inc.
$2.60 (-5.27%) $0.14

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