(MATR - Get Report) is turning into a chronic pain for shareholders.
The company, which manages the treatment of long-term illnesses, punished investors Thursday with its second weak forecast in two months. The company slashed its aggressive full-year targets, sending shares down 18%.
Matria maintained its
recently lowered second-quarter forecast
, but cut full-year revenue guidance to between $337 million and $341 million. Wall Street analysts had been banking on revenue of $361 million. Matria's new full-year profit target of $1.10 to $1.17 share looks to come in at the low end of Wall Street expectations even before stock-option expenses have been subtracted.
Matria blamed a big recent acquisition.
"The market's reaction to our acquisition of CorSolutions appears to be a general delay in awarding new-employer business to Matria," explained CEO Pete Petit. "Because our acquisition of CorSolutions is currently the largest transaction of this nature to occur in the disease-management market, consultants and prospective clients are being cautious. ... We believe this market pause is temporary,
the metrics upon which we acquired CorSolutions are still very compelling."
Mainstream analysts originally embraced that acquisition, issuing bullish reports that sent the company's stock rocketing to an all-time peak in February of $45 a share. But
short-sellers soon pounced on the stock
and triggered a big selloff. The stock now fetches less than it did before the acquisition and, in fact, sits at a new 52-week low.
Thus, those who believed in management -- which pointedly dismissed a negative report by Off Wall Street three months ago -- have paid dearly for their faith.
"I have been around Wall Street 25 years," BI Research analyst Tom Bishop boasted in a March conference call that Matria held in response to Off Wall Street's first report. "If I had to side with you or Off Wall Street, I think I would side with you."