Shares of Autodesk (ADSK) plunged more than 20% Friday after the software company reported a deeper-than-expected 9.3% drop in second-quarter earnings and disclosed plans to cut jobs as it grapples with weak demand in the U.S. and Central Europe.
Autodesk, which makes design software used by architects and engineers, also cut its projection for third-quarter sales well below Wall Street’s expectations.
Responding to the disappointing results and outlook, a slew of analysts cut their price targets and ratings on San Rafael, Calif.-based Autodesk.
Canaccord Genuity downgraded the stock to “hold” from “buy” and slashed its price target to $32 from $47.
"Business was cruising along well ... Then weakness hit in July and a combination of lingering effects from a sales team reorganization," Canaccord analyst Richard Davis wrote in a note, according to Reuters.
Late Thursday Autodesk reported a non-GAAP profit of 48 cents a share on sales of $569 million, trailing the Street’s view of 49 cents on revenue of $593.4 million.
For the third quarter, Autodesk is now calling for sales of $550 million to $570 million, which would widely miss consensus calls from analysts for $601.2 million. Autodesk sees non-GAAP EPS of 40 cents to 45 cents, compared with the Street’s view of 50 cents.
Autodesk also disclosed plans to take a pre-tax charge of $50 million to $60 million tied to a restructuring effort, but didn’t’ specify how many jobs would be cut.
Shares of Autodesk tumbled 20.44% to $28.42, knocking them almost 7% into the red on the year and trimming their 12-month rally to just 7%.