Why Gigamon Inc (GIMO) Stock Is Tumbling Today

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Gigamon Inc (NYSE:GIMO) ended fiscal 2016 with a bang as the company’s earnings came in ahead of expectations, but its outlook for the current quarter was weak.

Gigamon IncEarnings for the fourth quarter of last year amounted to $6.4 million, or 17 cents per share. However, net profit was much higher at 37 cents per share when adjusted for one-time items.

Wall Street was calling for earnings of 36 cents per share on an adjusted basis, according to the consensus estimate of six analysts polled by Zacks Investment Research.

The networking hardware company also revealed that revenue was $85 million for the three holiday months, which was a touch higher than analysts’ projections of $84.7 million.

Overall, Gigamon posted profit of $49.4 million for 2016, or $1.31 per share. Meanwhile, revenue came in at $310.9 million.

CEO Paul Hooper noted that the company added 126 new customers in the quarter, marking a record. A partnership with Amazon Web Services (NASDAQ:AMZN) helped to draw in more customers.

Company shares were lower despite the earnings beat as Gigamon revealed that first-quarter revenue will be in the range of $67 million to $70 million, which is similar to the $67.2 million it raked in a year ago.

Lower revenue can be attributed to deferred product bookings, as well as a slower period overall. Earnings are slated to be around $14.4 million, or 37 cents per share, which is a share higher than estimates.

GIMO stock suffered a 4.2% decline Friday.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/02/gigamon-inc-gimo-stock/.

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