CASA stock is taking a hit this morning after Casa Systems Inc (NASDAQ:CASA) reported an unexpected loss in its third quarter.
During this earnings season, the financial results of many tech firms have been in acute focus, and one of those was Casa Systems. The company announced its Q3 2019 financial results, which proved to be a disappointment for investors.
Investors Spooked
Casa Systems recorded a loss in the quarter, which proved to be a shock for the market as well as its investors. Although the revenues grew at an impressive rate, it fell short of what analysts on Wall Street were expecting.
The company, which is based out of Massachusetts, recorded a loss of $8.5 million. It proved to be a particularly problematic development since in the same quarter last year, it had actually made a profit. The losses for the period came to 10 cents per share, and the adjusted losses for the period were pegged at 3 cents a share. The average estimate of analysts who had been part of a Zacks Investment Research survey pegged the earnings per share at 11 cents.
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It goes without saying that this has come as a major setback. The losses triggered a selloff, and CASA stock crashed by as much as 30.65% to $4.66 in the early morning session.
The Chief Executive Officer of the company, Jerry Guo, explained the situation in a statement: “While our access device business was line with our expectations for the third quarter, revenue from our cable products, as well as revenue recognition from our wireless backlog, was lighter than anticipated.” Revenues grew by 14% year-on-year to hit $81.8 million, but at the same time, Casa’s operating expenses rose significantly from $34.3 million to $48 million.
In addition to that, the company’s cost of revenues also rose drastically. The figure rose from $14.6 million in the year-ago period to $42.6 million in the latest quarter. CASA stock is definitely one to watch over the coming days.
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