U.S. Markets closed

Why Calix Stock Was Slammed Wednesday

Daniel Sparks, The Motley Fool

What happened

Shares of communication equipment company Calix (NYSE: CALX) fell sharply on Wednesday, declining as much as 29.2%.

The stock's decline came following the company's fourth-quarter financial results, which included revenue that was meaningfully below analysts' forecasts and management's own guidance for the period.

A chalkboard sketch of a chart showing a stock price falling

Image source: Getty Images.

So what

Calix reported fourth-quarter revenue of $115.5 million, down from $138 million in the year-ago quarter. Management had guided for revenue during the period to be between $122 million and $127 million. In addition, analysts were expecting fourth-quarter revenue of about $125 million. 

Non-GAAP earnings per share for the period were $0.13, at the high end of management's guidance for $0.08 to $0.14 and above a consensus analyst estimate for $0.11.

"We are pleased to have exceeded consensus earnings by 2 cents per share in the fourth quarter of 2018 as revenue from our platform offerings exceeded our plan, while our legacy revenue fell short of our expectations owing to late-quarter softness by a few long-standing customers," Calix management wrote in the company's fourth-quarter shareholder letter.

Now what

Management said it expects first-quarter revenue between $100 million and $106 million, similar to analysts' average estimate for first-quarter revenue of $105.5 million. And management forecasts a non-GAAP loss per share for the period ranging from $0.07 to $0.02. Analysts, on average, were guiding for a loss per share of $0.05 during the period.

More From The Motley Fool

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.