Robin: "If we close our eyes, we can't see anything."
Batman: "A sound observation, Robin."
The Batman story has come a long way from the hilariously funny TV version of the late 1960s. The memorable comic-book graphics of Biff! Bam! Ka-Pow! filling the screen during the fight scenes have given way to a whole new superhero experience in the latest big-screen rendition, Batman Begins.
But while the new Batman Begins was edited and pieced together using Avid Technology's
Avid gave the bad news to shareholders in a preliminary second-quarter report filed a little more than a week ago. In it, the company indicated that results would come up short because of lower broadcast revenue and an unfavorable currency exchange. Even more disheartening to investors is that weakness is expected to carry into the third quarter as well -- again, partially because of the negative impact from a stronger dollar and a delay in new-product shipping.
That's the bad news. The good news is that Avid has not attributed any weakness to increased competition from the likes of Apple
If there's one good thing that comes from releasing bad news in a preliminary report, it's that when the bad news is confirmed later in its second quarterly report, it's already old news. Investors received the old bad news by bidding Avid's shares up slightly in after hours trading.
What's the bottom line with the bad news? It isn't pretty. While revenues continued on their double-digit pace, growing 14.4% to $160.1 million, the company couldn't offset the hit from product delays by increasing business in other areas. Lower-than-expected revenues, along with slightly higher expenses as a percentage of sales, resulted in sharply lower net income of $13.6 million in comparison with last year's earnings of $15.5 million.
As the company irons out its product delays and Avid digests the recent Whack! to its stock, this may be an opportune time to keep tabs on the company for future buying opportunities.
For more on Avid, check out these articles:
- Avid edits together a fine first quarter.
- Its digital fingers are into seemingly everything.
- Despite the competition, Avid remains on top.
- It's also a leading actor in the digital video revolution.
Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.