Why Acme Packet Plunged

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Acme Packet (NAS: APKT) plunged today by as much as 16% after the company provided a gloomy update on what to expect in its second-quarter results.

So what: The preliminary results peg revenue between $66 million and $68 million, with adjusted earnings in the range of $0.12 to $0.13 per share. Those figures are far short of the $74 million in sales and $0.18 per share of adjusted profit that the market was expecting.


Now what: CEO Andy Ory again cited "continued weakness in the North American service provider market," which is starting to get a bit old. It's the same song and dance we've been hearing for nearly a year, and investors are justifiably losing patience. After continued missteps in execution, I think it may be time to give up on Acme Packet.

Interested in more info on Acme Packet? Add it to your watchlist byclicking here.

At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio.Motley Fool newsletter serviceshave recommended buying shares of Acme Packet. The Motley Fool has adisclosure policy.
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