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What's happening? 
Shares of LeapFrog Enterprises (UNKNOWN:LF.DL) dropped more than 30% Friday after the company provided disappointing preliminary fiscal third-quarter results.

Why it's happening 
Quarterly revenue will be around $145 million, compared to LeapFrog's previous guidance of $220 million to $240 million. As a result, LeapFrog will turn in a net loss of roughly $124 million, which includes approximate noncash charges of $20 million for goodwill impairment and $87 million for deferred tax asset valuation allowance. Net loss per share will be around $1.77, compared to prior guidance for net income per share in the range of $0.16 to $0.28.

Analysts, on average, were expecting net income of $0.19 per share on sales of $226 million.

LeapFrog CEO John Barbour didn't sugarcoat it, saying, "We are very disappointed that our performance in the third quarter was significantly below our expectations and that we will not achieve our fiscal year guidance." Chief Financial Officer Ray Arthur went on to explain they also expect net sales to decline in the current quarter, though they "cannot provide a sales estimate at this time as we continue to evaluate our retail inventory levels coming out of the holidays." As a result, LeapFrog also withdrew its prior guidance for the current fiscal year ended March 31, 2015.