Cenveo Inc (NASDAQ:CVO) share price soared as much as 50% in Wednesday trading, supported by a surprising growth in its volumes. Cenveo’s stock trading volume increased to 384,042,9 this morning, compared to the three-month daily average of 736K. Cenveo is a diversified manufacturing company focused on print-related products.
Cenveo share price has experienced sharp volatility in the last couple of months. The company’s stock price declined 39% in the last three months and dipped almost 84% in the last twelve months. The steep decline in its price was the outcome of poor financial numbers and declining sales and revenues.
In the latest quarter, the company reported sales of $329.5 million, compared to the sales of $382.7 million in the past year quarter. The company also posted a huge loss of $28.1 million, relative to earnings of $9.4 million in the prior year period. Cenveo blamed the market environment for the big loss in the latest quarter.
“The operating environment we experienced during the first half of the year continued throughout the third quarter. We were again impacted by weakness in our direct mail business driven by softness from our financial institution customers due to lower customer acquisition related mailings,” said Robert G. Burton, Sr., Chairman and CEO of Cenveo.
Moreover, Cenveo’s financials are likely to remain under pressure for the full FY2017. The company expects its revenue to stand in the range of $1.315 billion, significantly lower from $1.6 billion 2016 and $1.74 billion in 2015.
In order to cope with the losses, the company is working on cost-cutting initiatives. In the latest quarter, it generated $7 million worth of benefits through cost cuttings, taking its year to date savings to $18 million. Cenveo expects to expand its run rate savings to $65 by the end of the next year. Overall, it appears that investors are trying to take the benefit of the sharp decline in Cenveo share price. However, the company’s short-term fundamentals are bleak to offer a strong support to the share price.
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