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Shares of Luxoft Holding Inc. (NYSE: LXFT) are plummeting today, down 28.2% as of 11:15 a.m. EDT, after the software engineering company posted disappointing fiscal first-quarter 2018 results. Luxoft's quarterly revenue climbed 17.5% year over year to $209.2 million, while adjusted net income per share fell 19.4% to $0.50.
Luxoft doesn't provide quarterly financial guidance, but investors expected the company to post significantly higher adjusted earnings of $0.75 per share on revenue of $213.5 million.
To blame, according to Luxoft CEO Dmitry Loschinin, was a combination of an expected deceleration from Luxoft's top two accounts, seasonal weakness, a slowdown in the financial services segment (where revenue declined 6.7% to $113.5 million), and slower growth amid the restructuring of two large M&A-centric clients.
To be fair, Luxoft saw revenue from clients outside of its top two climb an impressive 55% year over year, and top-three client concentration fell 16% from last year's fiscal first quarter. What's more, Luxoft drove solid growth in its smaller automotive (up 38% to $35.1 million), digital (up 30% to $25.8 million), and telecom (up 157% to $25.5 million) verticals.
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But that wasn't enough to prevent Luxoft from reducing its full-year outlook. The company now expects fiscal 2018 revenue to be at least $920 million (down from guidance provided last quarter for at least $943 million), GAAP earnings per diluted share of at least $1.53 (down from $1.90), and adjusted earnings per share of at least $2.85 (down from $3.26).
All things considered, this was a painful quarter despite Luxoft's bright spots. It's hard to blame the market for taking a step back from Luxoft stock today.
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