Rosetta Stone drops after posting wider 1Q loss

Rosetta Stone posts larger 1st-qtr loss as sales fall, shares tumble

Associated Press

ARLINGTON, Va. (AP) -- Rosetta Stone Inc. shares tumbled Thursday after the foreign language education company said its first-quarter loss widened and it posted lower-than-expected sales.

THE SPARK: The Arlington, Va.-based company's loss totaled $4.7 million, or 22 cents per share, in the three months ended March 31. That compared with a loss of $1.9 million, or 9 cents per share, in the same quarter of 2012. Excluding one-time costs, the company said its adjusted loss was 3 cents per share for the recent quarter.

Total revenue fell 8 percent to $63.9 million from $69.4 million, as international revenue dropped 30 percent, partially as a result of weak Japanese demand. North American consumer revenue fell 4 percent.

Rosetta Stone posted its results after the market closed on Wednesday.

THE BIG PICTURE: The company's adjusted loss was smaller than expected, but its revenue fell short of Wall Street forecasts.

Analysts, on average, expected a loss of 9 cents per share on $64.5 million in revenue, according to FactSet.

Total bookings fell 8 percent to $60.4 million, hurt by a 34 percent drop in international consumer bookings.

THE FORECAST: The company backed its previous 2013 guidance for adjusted results ranging between a loss of 2 cents and a profit of 4 cents per share. Revenue is expected to total between $280 million and $290 million.

Analysts expect a 2013 profit of 2 cents per share and $285.3 million in revenue.

SHARE ACTION: Rosetta Stone shares fell $2.09, or 12 percent, to $15.93 in afternoon trading, after dropping as low as $15.80 earlier in the session. Over the past 52 weeks, the stock has traded between $9.26 and $18.30.

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