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What: Shares of Riverbed (NASDAQ:RVBD) have plunged today by as much as 17% after the company reported worse-than-expected earnings.
So what: Adjusted revenue for the quarter was $255 million, slightly below the $257.7 million forecast. Non-GAAP earnings per share of $0.22 was right on target with expectations. Guidance was also soft due to weak government spending.
Now what: CEO Jerry Kennelly said that government spending had slowed due to sequestration, which led to the sales shortfall. The challenges are expected to continue, as its third-quarter sales outlook is $265 million to $270 million. The Street was modeling for $275 million in revenue next quarter. Kennelly also acknowledged that Riverbed still has some work ahead of it with integrating its recent OPNET acquisition.
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Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends Riverbed Technology. The Motley Fool owns shares of Riverbed Technology. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.