What: Shares of InvenSense (NYSE: INVN) fell as much as 20.5%, then partially recovered to trade down 13.3% as of 11:00 a.m. ET Tuesday after the motion sensor chip company released solid fiscal-fourth quarter 2016 results, but followed with disappointing guidance.
So what: Quarterly revenue declined 19.9% year over year, to $79.5 million, within InvenSense's guidance for revenue of $77 million to $83 million. Adjusted gross margin rose 1 percentage point over the same period, to 45%, near the high end of the company's 44% to 45% outlook. Based on generally accepted accounting principles (GAAP), that resulted in a net loss of $22.9 million, or $0.25 per share. But on an adjusted (non-GAAP) basis -- which excludes $0.13 per share related to stock-based compensation and intangibles and $0.14 per share from more unusual income tax valuation allowance increases -- InvenSense's net income came in at $0.02 per share, also near the high end of guidance, which called for adjusted net income in the range of breakeven to $0.02 per share.
By comparison -- and with the caveat that we don't lend much credence to Wall Street's near-term expectations -- analysts' consensus estimates predicted InvenSense would turn in roughly the same adjusted earnings of $0.02 per share on revenue of $79.9 million.
InvenSense CEO Behrooz Abdi added, "Q4 was a solid quarter, capping off a productive year for InvenSense. [...] Our market-leading solutions continued to gain traction in emerging Internet of Things (IoT) platforms such as drones, virtual and augmented reality, wearables, smart home, and industrial applications."