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What's Happening: Shares of Ubiquiti Networks (NASDAQ:UBNT) plunged by as much as 13.5% when the market opened on Friday, after the company announced the resignation of its CFO and preliminary results for its fiscal third quarter. The stock quickly reversed course, though, down by only 4% by 1 p.m.
Why It's Happening: Ubiquiti had previously guided for revenue to be in the range of $146 million to $158 million for the third quarter. The company's preliminary revenue figure of $147.5 million comes in at the low end of this range, representing a slight year-over-year decline. The analyst consensus for third-quarter revenue was $153.4 million.
Previous guidance for non-GAAP EPS for the third quarter was in the range of $0.45-0.50. The company's preliminary non-GAAP EPS figure of $0.47 is barely on the low end of this expected range, but it's lower than the analyst consensus estimate of $0.49.
No explanation was given for the preliminary results being at the low end of Ubiquiti's previous guidance. The market's initial reaction to the news was extreme given that the company's preliminary numbers are only slightly lower than expected.
The company said CFO Craig L. Foster resigned April 21 to accept a position with another company and that this "was not due to any disagreement with the Company regarding its operations, financial reporting, policies or procedures." Two company executives will be filling in on Foster's duties while the company searches for a new CFO.
Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Ubiquiti Networks. 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.