What happened
Investors were looking for the exits this morning after Arlo Technologies (ARLO 0.29%), a smart-home security company, reported its third-quarter results.
The company reported top- and bottom-line results that beat Wall Street's expectations, but it was Arlo's disappointing fourth-quarter guidance that sent the tech stock falling today.
As a result, the company's share price was down a shocking 32.2% as of 11:44 a.m. ET.
So what
Let's start with the good news first. Arlo's non-GAAP (adjusted) loss per share in the quarter was $0.05, an improvement from the company's loss of $0.08 in the year-ago quarter and ahead of analysts' consensus estimate of a loss of $0.13 per share.
The company's sales also improved by 15.3% from the year-ago quarter to $128.2 million, ahead of Wall Street's average estimate of $127 million.
But investors were more interested in the company's fourth-quarter guidance. Arlo expects an adjusted loss per share in the range between $0.06 to $0.13, compared to Wall Street's average estimate of a loss of $0.11 per share.
Arlo's sales guidance was much lower than expected, with management issuing sales guidance in the range between $105 million to $115 million. This is far below analysts' consensus estimate of $138.6 million.
Now what
Investors are particularly critical of technology companies' earnings results these days, so it's not surprising to see the company's share price falling today.
With Arlo issuing revenue guidance that fell short of Wall Street's expectations, shareholders are losing faith in the company's ability to continue growing amid an uncertain macroeconomic climate.
