Gigamon (GIMO) Shares Sink After Outlook Cut
Shares of Gigamon Inc. (GIMO) were off -6.44 or -24.58 percent to $19.76 per share in pre-market trading on Tuesday, after the company announced late yesterday a reduction in its outlook on revenue for the quarter ended March 29th. Gigamon stock closed at $26.20 per share, down -0.22 or -0.83 percent in Mondayâ s regular trading session.
Santa Clara, California based Gigamon Inc. is a technology company that invents and markets cutting edge network monitoring switches. The switches are used to retrieve traffic from a network and then send custom data streams to the networkâ s security and monitoring tools. Gigamonâ s GigaVUE Data Access Systems have been deployed by the thousands in over 500 medical, government, industrial, manufacturing, financial, telecom, research, retail, and utility networks in more than 40 countries around the world. The slide in Gigamon shares began after the announcement of its preliminary first quarter results yesterday in afterhours trading. The company said it now expects revenue of $31 million to $31.5 million, versus their stated guidance of $34 million to $35 million. The analyst consensus was for revenue to come in at $34.8 million. According to Gigamon, the shortfall in revenue was due to an expected transaction with a customer in the emerging markets failed to materialize. The transaction failing to take place led to the company to take an excess inventory charge of roughly $2.3 million in the quarter, which impacted its revenue guidance. The company also reported GAAP gross margins to be in the range of 70 to 71 percent, with Non-GAAP gross margins in the 71 to 72 percent range. This compares to the companyâ s original guidance of 78 to 79 percent. Paul Hooper, the Gigamon's chief executive officer said that, "While we are disappointed in these preliminary results, we remain confident in our business strategy and the market opportunity," he added, â
Published on Apr 8, 2014
By Jay Hawk