Ambarella Drops After Earnings Include Weaker-than-expected Forecast

Ambarella Inc. shares slipped more than 6% Tuesday afternoon following an earnings report that beat expectations but projected the current quarter's results lower than analysts expected. The company, which makes components for cameras and is a major supplier for GoPro Inc. , reported net income of $2.6 million, or 7 cents a share, on revenue of $64.1 million for its fiscal first quarter. After subtracting stock-based compensation and adjusting for other factors, Ambarella claimed profit of 39 cents a share. Analysts on average expected Ambarella to report adjusted earnings of 36 cents a share on sales of $63.5 million, according to FactSet. Ambarella's forecast for the current quarter calls for revenue of $69 million to $72 million and a sequential decline in gross margin, to a range of 62% to 63.5%, after an adjusted margin of 64.3% in the first quarter. Analysts on average expected revenue of $72.3 million, FactSet reported. Shares declined nearly 6% in immediate late trading following the report's release, dropped lower than $56.50 after closing with a 1.3% gain at $59.72.