Quantum Shares Leaped Backward: What You Need to Know
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 Quantum (NYS: QTM) took a leap backward today, just like Dr. Sam Beckett from the iconic 2-decade-old TV show, trading as much as 26% lower after the company reported third-quarter earnings.
So what: Revenue turned out to be $173 million, down about 2% from the prior year, with non-GAAP earnings per share of a nickel. The top- and bottom-line results beat and met expectations, which were for $171.1 million in sales and $0.05 per share in profit.
Now what: The company attributed the year-over-year declines in revenue and profit to expected reductions in OEM and royalty revenue, along with lower tape-related service and media royalty revenue. The outlook for next quarter is also weighing on shares, as Quantum expects gross margin to contract and predicts revenue of $160 million to $170 million.
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