What happened
Yeah, that's going to leave a mark. Shares of Cerence (CRNC -14.81%) were plunging in morning trading today, falling 32.8% as of 10:57 a.m. ET after a fiscal first-quarter earnings report that offered guidance well below what Wall Street was forecasting.
Couple that with the announcement that Cerence's chief financial officer (CFO) was leaving in mid-March, and investors wanted nothing to do with the maker of conversational artificial intelligence solutions for the automotive market.
Image source: Getty Images.
So what
Cerence revenue just beat out consensus estimates, coming in at $94.42 million compared to analyst expectations of $94.38 million, and adjusted earnings of $0.59 per share handily outstripped forecasts of $0.51.
However, management's second-quarter guidance for $84 million at the midpoint of its revenue range was well below the $100 million Wall Street was looking for, as was its full-year estimates.
Cerence cut guidance for all of 2022 from a range of $400 million to $425 million down to $365 million to $385 million, considerably below the $413 million analysts anticipated.
CFO Mark Gallenberger also announced he would retire effective March 11 though he will remain in an advisory role until November. Cerence is conducting a hunt for a replacement.
Now what
It's not the first time the markets dumped Cerence stock after an earnings report, having done the same thing for similar reasons in November.
Yet Cerence's prior guidance for the coming year was based upon the potential for a number of one-time technology licensing opportunities that now look like they won't materialize. The company said, "Although attractive opportunities remain, these may not all be realized during our fiscal year as previously expected."
It's going to remain a pothole-filled road for Cerence investors.
