Why Ubiquiti Networks fell at 11%?

Why Ubiquiti Networks fell at 11%?


Shares of Ubiquiti Networks have been reported to plunge as 11% decrease. However, the stock price closed at 3% but was surely back down with 2.15% from the previous close. No doubt it has always been a nerve-jolting experience to see shares crashing this hard on very heavy volume.

Ubiquiti shares were downgraded at a sudden by some analysts because a brief dip followed a mixed 4Q report alongside equally assorted first Q guidance figures.

“We are making investments in our company that we believe will help us expand our addressable market and maintain our industry leading financial metrics. We are well placed to grow significantly in the next few quarters due to the following growth drivers: new product launches, 802.11ac upgrade cycle, a lessening impact of foreign currency fluctuations on the business, and the United States E-Rate funding program.” – Ubiquiti CEO Robert Pera

In the fiscal year 2015’s 4Q, the Internet-based communications specialist saw sales falling 7% annually to land at US$ 145 million.

Adjusted earnings/diluted share lowered at 10% to US$ 0.50/share.

At that time the analysts were looking for earnings of US$ 0.46/share on roughly US$ 146 million in sales, so Ubiquiti had beaten the bottom-line target by a fair margin while falling just short of sales expectations.

Enterprise technology sales rose 27% above the year-ago period’s reported sales to stop at US$ 40.5 million, driven by rapid market acceptance of the new Ubiquiti UniFi access point and other recently released products while South American customers enhanced their orders by 45% compared as compared to 3Q, causing a distribution conundrum for Ubiquiti.

Not to mention, Based on current business trends and order flows, Ubiquiti centered first Q revenue guidance on the US$ 150 million mark (below Wall Street’s prevailing US$ 154 million). The same trends have led to adjust earnings around US$ 0.50/share (above current US$ 0.27 consensus).

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