Shares of global software firm Ribbon Communications, Inc. (NASDAQ: RBBN) lost 18.1% in the extended trading session on Thursday after the company’s preliminary fourth-quarter revenues missed analysts’ estimates. The stock was trading over 6% lower in the early trading hours on Friday, at the time of writing.
For the fourth quarter of 2021, Ribbon expects revenue to total $231 million, missing analysts’ expectations of $248.77 million. Adjusted gross margin is projected to come in at 54% and adjusted EBITDA is likely to amount to $26 million.
The company anticipates to report an operating loss of $4 million and end the quarter with $106 million cash in hand.
Sales of the IP Optical Networks segment is expected to rise 20% quarter-over-quarter to around $83 million, while the Cloud & Edge segment’s revenue is expected to total $147 million.
The President and CEO of Ribbon Communications, Bruce McClelland, said, “While we are disappointed by the results this quarter and the impact from the challenging supply environment, we remain excited by the continued progress we are making on our strategy to position our IP Optical Networks solutions with key Ribbon customers including several new wins with major carriers this quarter in the U.S., Japan, and Africa regions, and that investment in fiber networks and communications will position us for growth in 2022 and beyond.”
The company’s upcoming earnings report for the fourth quarter and full-year 2021 is scheduled to be released on February 16, 2022.
Headquartered in Texas, Ribbon makes software, IP and optical networking solutions for service providers, enterprises and critical infrastructure sectors.
Overall, the stock has a Moderate Buy consensus rating based on 2 Buys and 1 Hold. The average Ribbon Communications stock price prediction of $9.33 implies 75.7% upside potential. Shares have lost 26.8% over the past six months.
Hedge Fund Activity
TipRanks data points that Wall Street’s top hedge funds have increased holdings in RBBN by 131,900 shares in the last quarter, indicating a Positive hedge fund confidence signal in the stock.
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