Citrix Systems Inc. shares plunged Thursday on the cloud computing company's forecast for a disappointing third quarter.
THE SPARK: The company said late Wednesday that it expects to earn 68 cents to 69 cents per share for the quarter on an adjusted basis on revenue of $710 million to $712 million. That is below the 73 cents per share on revenue of $737 million that analysts polled by FactSet were forecasting.
THE BIG PICTURE: Citrix CEO Mark Templeton said that he is disappointed in the results but remains confident about the company's strategy. He said he will provide more details when the company's full quarterly results are released Oct. 23.
THE ANALYSIS: Cowen and Co. analysts Gregg Moskowitz and Matthew Broome said that the unexpected and unexplained drop in third-quarter expectations should cause the stock price to fall, making a good opportunity to buy at a low price. But without further information or clarity until later this month, they said it will be exceedingly difficult for investors to step in with confidence.
The analysts also said in a research note that the third quarter is a disappointment to many after the company's strong second quarter. They do not believe the company's competitive position or prospects for growth have changed materially and suspect the weakness was concentrated at the end of the quarter.
They wrote in a research note that the magnitude of the miss makes it likely that the shortfall wasn't isolated to one particular area.
SHARE ACTION: Shares of the company fell $7.90, or 11.9 percent, to $58.76 by midday. Its stock fell as low as $58 earlier in the day, nearing the bottom of its 52-week trading range of $56.57 to $77.16.