What happened
Shares of Switch (SWCH) tumbled on Friday. As of 1:10 p.m. EDT, the stock was down more than 11%.
Investors are likely disappointed in the data center operator's third-quarter results, which featured revenue and earnings per share that were below analysts' consensus forecasts. In addition, management's move to lower its full-year 2021 revenue guidance may have spooked investors.
Image source: Getty Images.
So what
Switch reported third-quarter revenue of $158.1 million, up from $128.8 million in the year-ago quarter. The tech company's adjusted earnings per share came in at $0.01 -- down from $0.05 in the year-ago quarter. Analysts, on average, were expecting revenue of $159.8 million and adjusted earnings per share of $0.04.
"We are pleased by the continued trend of organic revenue acceleration and strong sales performance in the third quarter and year-to-date 2021 periods," said Switch chief financial officer Gabe Nacht in the company's earnings release.
Switch's lowered revenue guidance was likely also a disappointment for some investors. Management said it now expects full-year revenue to be between $563.5 million and $566.5 million. Previously, management was expecting full-year revenue between $566 million and $574 million.
Now what
Explaining its lowered view for revenue, management said in the company's third-quarter earnings release that it was due to lower-than-expected "contribution from pass-through power revenue during the second half of 2021, in addition to a modest timing difference in customer deployments relative to prior expectations."
