Why FEI Company's Shares Shorted Out

By Alex PlanesFool.com

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What's happening?Shares of FEI are currently trading 8% lower today after dipping by as much as 10% in early trading, after the nanotechnology instrument specialist reported underwhelmingearnings and offered weak forward guidance following Wednesday's closing bell.

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Why it's happening.FEI's revenue came in at $265.3 million for the fourth quarter, well below Wall Street's expectations of $274.1 million. The company's adjusted earnings of $0.98 per share also missed Wall Street's consensus estimate of $1.03. The company blamed unfavorable foreign exchange rates and the oil price crash for its shortfall. Over its entire 2014 fiscal year, FEI earned$2.47 in adjusted EPS on revenue of $956.3 million, which compares unfavorably to 2013's $976.2 million top line and $3.03 in adjusted EPS.

Looking ahead, FEI now expects to earn between $215 million and $230 million in first-quarter revenue, which was reduced by approximately 5% over earlier estimates by unfavorable foreign exchange rates. The company expects GAAP earnings to come in at a range of $0.55 to $0.65 per share for the quarter, and these results will likely be more in line with any adjusted results, since FEI recorded an unusually high $7.8 million in one-time charges for the fourth quarter.

FEI expects its full-year performance for 2015 to result in organic revenue growth of 5% to 9% over 2014, but this growth will take a 4% hit from currency exchange rates, resulting in a likely full-year revenue range of roughly $986 million to $1,025 million. The company is also projecting GAAP earnings of $3.40 to $3.70 for 2015. Both of these ranges fall below Wall Street's expectations of $1,050 million in revenue and $4.03 in EPS, particularly on the bottom line.

The article Why FEI Company's Shares Shorted Out originally appeared on Fool.com.

Alex Planes has no position in any stocks mentioned. The Motley Fool recommends FEI. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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