
Pure Storage shares slump 15% following performance results of the third quarter
- Pure Storage beats analysts forecast for EPS but misses revenue estimate for 2019's Q3.
- CEO Charlie Giancarlo cites macroeconomic uncertainty as reason for poor performance.
- Cisco and Arista have also announced worse than expected results in the past week.
- Pure Storage stock drops by 15% in after-hours trading on Thursday following the report.
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One of the leading names in high-speed storage
equipment manufacturers, Pure Storage, is the latest to join the league of tech
infrastructure providers to have registered losses in the third quarter of
2019. Pure Storage’s representative has cited the uncertainty in the
macroeconomic conditions and the ongoing U.S – China trade complications to be
the reasons behind the poor Q3 results.
Stock Market Response
Copy link to section Following the Q3 earnings report, share prices for Pure Storage were reported to have dropped by 15% in after-hours trading on Thursday. The stock opened at $20.14 on Thursday but was seen trading significantly lower at $15.95 in extending trading. As of Friday, the stock recovered a little and closed the day at $16.86. The year-to-date performance for Pure Storage in the stock market has almost remained flat on average. Opening at $16.41 at the start of the year, the stock is currently trading at $16.86. It has printed a year-to-date high of $23.38 in April followed by the year-to-date low of $13.22 in August. Pure Storage, however, is not the only one to have recently missed the analysts’ estimate in the niche of tech infrastructure providers. Arista and Cisco have also printed worse than expected results in the past weeks. Based on Refinitiv’s survey, analysts’ are anticipating $511.3 million in sales for Pure Storage in the fiscal fourth quarter. The company itself, however, is aiming for the target of $484 to $496 million.Pure Storage, Cisco, And Arista CEOs Cited The Same Reasons For Poor Performance
Copy link to section CEO Charlie Giancarlo stated in a conference call that owing to the macroeconomic complications including Brexit and U.S – China trade talks, companies have lost pace in finalizing their buying decisions, leading to a more challenging market than ever before. CEO Chuck Robbins of Cisco had cited the same reasons for poor performance. Against analysts’ estimate of 2.6% growth in the fiscal second quarter, the company expressed that it anticipates a drop of 3 to 5 percent. According to the analysts, Arista’s underperformance, however, was derived from the declining business rather than the macroeconomic uncertainty. Jayshree Ullal, the Chief Executive of Arista, had still stated that the rising tensions in global outlook may manifest in even worse performance in the next fiscal year. Wall Street analysts had anticipated 9 cents of earnings per share for Pure Storage in the third quarter while the estimate for revenue was highlighted at $439.91 million. While the company beat analysts forecast of EPS printing 13 cents per share of earnings, revenue trailed behind the expectation and was noted at $372.78.Advertisement
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