Shares of Cambium Networks experienced a decline following the company's announcement that its third-quarter revenue would be lower than anticipated. Additionally, the company has decided to suspend its full-year guidance.
In post-market trading, the stock dropped by 19%, settling at $6.40. However, prior to this setback, shares had experienced a 3.7% increase at the close of Wednesday's trading session. Unfortunately, it has been a challenging year for Cambium Networks, as stock prices have plummeted by a total of 63%.
Revenue Expectations and Preliminary Results
Cambium Networks, headquartered in Rolling Meadows, Illinois, released preliminary information regarding its third-quarter revenue. Forecasted figures range from $40 million to $45 million, which is significantly lower compared to the previous outlook of $62 million to $70 million. Analysts polled by FactSet had set expectations at $64.2 million.
Factors Contributing to the Revenue Decline
The decline in revenue can be attributed to various factors. Firstly, the government's delays in ordering, caused by budgeting schedules, have had a significant impact. Secondly, the business activity within Cambium Network's point-to-multi-point unit has been slower than anticipated. Lastly, the company has experienced fewer orders from enterprise distributors due to prevailing economic challenges.
Future Sales Outlook and Earnings Guidance
Cambium Networks anticipates that sales pressure will persist as channel inventories decrease. Consequently, the company has revised its earnings projections for the third quarter, indicating they will fall below the previously provided guidance range.