Why Ixia Shares Slumped
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 Internet specialist Ixia were getting booted out of investors' portfolios today, falling as much as 13% after a disappointing earnings report.
So what: Ixia's numbers were actually pretty strong on the surface, as revenue was up 43%, though all of that growth came from acquisitions. Without the addition of Anue Systems and BreakingPoint Systems last year, sales actually declined 2%. Adjusted earnings per share also beat estimates by $0.03, coming in at $0.25.
Now what: The market seems to be punishing Ixia for the drop in organic revenue, and management admitted to seeing a slowdown from some equipment manufacturer deals. Still, the company expects growth in its core business to increase 7% sequentially in the current quarter, and the stronger-than-expected growth from its acquisition should also not be overlooked. Given the growth potential there, Ixia looks like it should be able to bounce back.
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The article Why Ixia Shares Slumped originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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