Accuray shares slide after sales report
Accuray shares slide after company reports lower-than-expected revenue
Shares of Accuray Inc. continued to slide Friday, a day after the radiation-treatment equipment maker announced lower-than-expected revenue for its fiscal second quarter and said it planned job cuts.
THE SPARK: The Sunnyvale, Calif., company said late Thursday that it anticipates fiscal second-quarter revenue of $72 million to $75 million. That is down sharply from the $106.4 million in revenue it brought in the previous year's fiscal quarter. The revenue also falls short of the $93.8 million that analysts polled by FactSet had expected.
The company also plans to cut its workforce — which totaled 1,100 people as of June — by 13 percent.
Accuray blames problems with changes to its sales force, manufacturing and supply chain.
THE BIG PICTURE: For fiscal 2013, which runs through June, Accuray expects to post a loss of 87 to 95 cents per share, excluding one-time items, on revenue of $320 million to $330 million.
Analysts had forecast an adjusted loss of 55 cents per share on revenue of $406 million for the year.
THE ANALYSIS: J.P. Morgan analyst Tycho W. Peterson downgraded the stock to "Underweight" from "Neutral." The analyst competition the company faces, its own execution problems and the prospect of market-share losses and a cash burn "for the foreseeable future."
Jefferies analyst Raj Denhoy lowered his price target on the stock to $6.50 from $10 but kept a "Buy" rating. The analyst said in a research note Friday that a "reset" under new CEO Joshua Levine was expected, but the severity was a surprise.
Even so, Denhoy said he still thinks the company's technologies are valuable, supporting its stock in the long term.
SHARE ACTION: Down 19 percent, or $1.29, to $5.49 in Friday afternoon trading while broader trading indexes were nearly flat. The company's stock started sliding Thursday evening after it made the announcement.
