Inner Workings' stock plunges on disappointing 3Q

Inner Workings 3rd-quarter report, forecast misses analysts' targets; stock plummets

Associated Press

NEWS: Inner Workings Inc.'s third-quarter earnings fell below analysts' projections as the supplier of marketing materials ran into trouble in its European operations. Management warned the problems will drag down its performance in the current quarter, too, causing Inner Workings' stock to plunge by more than 22 percent late Wednesday.

DETAILS: The Chicago company blamed the letdown on its production graphics division in Europe. Inner Workings has brought in new leaders to turn things around, but an upturn doesn't look likely before the end of the year after management dimmed its outlook.

NUMBERS: Inner Workings earned $7.3 million, or 14 cents per share, during the three months ending in September. That's a 46 percent increase from net income of $5 million, or 10 cents per share, at the same time last year.

If not for one-time gains and other items unrelated to its ongoing business, the company said its earnings would have been shaved to 5 cents per share. That figure fell below the average estimate of 16 cents per share among analysts surveyed by FactSet.

Revenue for the period climbed 16 percent to $232.6 million, about $4 million below analyst forecasts.

FUTURE: The company predicted its revenue for the entire year will range from $865 million to $880 million, down from a previous forecast of $910 million to $940 million. That implies Inner Workings will generate fourth-quarter revenue of $217 million to $232 million, missing analysts' target of $261.5 million.

Management also cut its earnings projection for the full year to a range of 16 cents to 20 cents per share, down from 45 cents to 50 cents per share previously.

STOCK: Shares plummeted $2.10 to $7.39 in extended trading after the news came out.

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