What:Shares ofAcxiom Corp. took a spill Wednesday after the software-as-a-services provider gave weak guidance in its fiscal fourth-quarter report. The stock closed the trading day down 12.1%.
So what:Acxiom actually beat analysts' estimates for the quarter that ended March 31, posting an adjusted profit of $0.18 against expectations of $0.09. Revenue improved 9% to $225 million, also beating estimates. CEO Scott Howe said the performance capped a strong year, and said the company extended its leadership in data connectivity with "the launch of LiveRamp Customer Link" and expansion of data onboarding in the U.K. and France.
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Now what: The issue that seemed to sink the stock was its guidance for the current year; management expects revenue will improve in fiscal 2017 by just 2.5% to 5% to between $870 million and $890 million, and foresees earnings per share of around $0.55, down from $0.59 in fiscal 2016. Analysts had been forecasting EPS of $0.65 and revenue of $893.5 million.
The reasons for the downbeat guidance were not immediately clear. However, the company has a strong track record of easily beating estimates, so it may just be playing it conservative as it enters the new fiscal year. I wouldn't change my investing thesis based on Wednesday's news.
The article Why Acxiom Corp. Shares Sank on Wednesday originally appeared on Fool.com.
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