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What: Shares of LeapFrog Enterprises (UNKNOWN:LF.DL) were getting left behind today, finishing down 8% after providing disappointing guidance in its third-quarter report.

So what: The children's educational toy-maker actually beat EPS estimates with a profit of $0.37 against $0.32 estimates, though sales missed the mark. However, the company sharply reduced its expectations for the all-important holiday quarter. CEO John Barbour said, "We are well positioned for the holidays with improving in-stocks and stronger retail promotions, but at the same time, we see a weak retail climate an growing concern surrounding this holiday season, especially in the U.S." As a result, LeapFrog said it expected full-year sales of just $570 million to $590 million, about even with last year, and EPS of $0.36-$0.46.

Now what: The outlook was greeted with boos from the market and downgrades from at least one analyst; however, this company's guidance seems awfully conservative. Breaking down the outlook for just the fourth quarter, it means LeapFrog sees a per-share figure of up to only $0.18 in the current, and it expects revenue similar to the third quarter even though the holiday season is usually much stronger. Either management is lowballing it here, or they know something they're not telling us. To blame that much of a drop on macroeconomics and a shorter holiday season seems a bit absurd.