Shares of Turtle Beach (HEAR 2.03%) were trading down 33% as of 12:58 p.m. ET on Tuesday after the company delivered disappointing second-quarter earnings results.
Turtle Beach has had a rough outing over the past year. The company reported a sales decline of 48% year over year -- the fifth consecutive quarter of declining sales.
On top of weak sales, management also updated investors on efforts to secure a sale of the company. In short, no third parties are interested. The current weak market conditions and macroeconomic headwinds have dampened interest from potential suitors. That news may have further pressured the stock's performance today.
As for the quarter itself, Turtle Beach is suffering from a broad decline across the PC and gaming peripherals markets. PC shipments started to weaken in the first quarter, but weak demand trends accelerated in the second quarter. The International Data Corporation reported that PC shipments fell 15% in the second quarter, which may also be spilling over to the market for video game consoles -- a key driver of sales for Turtle Beach's console gaming headsets.
Management is focused on bringing operating expenses down to meet lower demand in the near term, which is desperately needed. The company reported a second-quarter loss of $17.8 million, down from a profit of $1.7 million in the year-ago quarter.
It's not all doom and gloom. Management said its strategy to expand into nonconsole headset categories is showing progress, which contributed more than 25% to total sales in the quarter.
Retailers are pulling back on stocking inventory amid the macroeconomic challenges, but light inventory levels could create a more favorable supply-demand balance that leads to better profitability when consumer demand picks up again.