Rosetta Stone Drops On Consumer Business Worries

NEW YORK (AP) — Shares of Rosetta Stone Inc. on Friday plunged to a new low after the language learning software company signaled slowing growth in its U.S. consumer business.

"We feel that the current economic environment is having an effect on our U.S. consumer business, resulting in greater variability in our operating results as we head into the holiday season," said CEO Tom Adams in a statement Thursday.

Shares sank $2.16, or 10.5 percent, to $18.35 in morning trading Friday. The shares earlier traded as low as $17.71, their cheapest price since their April debut. Their previous bottom of $19.34 was set Wednesday.

Late Thursday, Rosetta Stone reported net income of $5.3 million, or 25 cents per share, down 12 percent from $6 million, or 36 cents per share, in the same quarter last year. Excluding special charges for stock-based compensation, fees for a canceled stock offering and other expenses, the company earned 29 cents per share.

Sales rose 12 percent to $67.2 million in the latest quarter.

Analysts polled by Thomson Reuters had expected profit of 24 cents per share on sales of $65.6 million.