Why Acme Packet Plunged

by Evan Niu, The Motley Fool Jul 6th 2012 3:43PM
Updated Jul 6th 2012 3:46PM

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.

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At the time this article was published Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Acme Packet. The Motley Fool has a disclosure policy.
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