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Why SeaChange International (SEAC) Stock Is Sinking This Morning

NEW YORK (TheStreet) -- Shares of SeaChange International (SEAC) are lower by -5.41% to $8.80 following the company's 2015 first quarter financial results, which showed revenue and earnings came in below analysts' expectations.

The multi-screen video delivery company posted a quarterly EPS loss of -22 cents per share, missing the consensus estimate of -2 cents per share.

During the same period last year the company reported an EPS gain of 4 cents per share.

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Revenue for the most recent quarter was $24.3 million versus $35.6 million from the 2014 first quarter.

The consensus estimate for 2015 first quarter revenue was $30.87 million.

Separately, TheStreet Ratings team rates SEACHANGE INTERNATIONAL INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SEACHANGE INTERNATIONAL INC (SEAC) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SEAC has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.63, which clearly demonstrates the ability to cover short-term cash needs.
  • SEACHANGE INTERNATIONAL INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SEACHANGE INTERNATIONAL INC continued to lose money by earning -$0.07 versus -$0.09 in the prior year. This year, the market expects an improvement in earnings ($0.33 versus -$0.07).
  • SEAC, with its decline in revenue, underperformed when compared the industry average of 7.5%. Since the same quarter one year prior, revenues fell by 20.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 121.5% when compared to the same quarter one year ago, falling from $6.54 million to -$1.41 million.
  • Net operating cash flow has significantly decreased to $1.97 million or 90.25% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: SEAC Ratings Report
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