NEW YORK (TheStreet) -- Infoblox (BLOX) is set to have a rough day Wednesday after suffering significant losses in premarket trading. The network tech company posted better-than-expected earnings on Tuesday night, but conservative guidance and growth concerns weighed heavily on the stock. Before the bell, shares had slumped 18% to $36.85.
Expectations have been high for the company, a developer of automated network solutions, whose stock has rallied 150.2% over the year. Management forecast second-quarter earnings between 9 cents and 11 cents a share on revenue in the range of $65 million to $66 million. Analysts surveyed by Thomson Reuters were expecting profit of 12 cents a share on revenue of $67 million. At an estimated 19% to 21% year-over-year sales increase, the lowest rate in five quarters, the forecast sparked concerns of slowing growth.
"We have had significant quarter-over-quarter revenue growth and product growth for the past five or six quarters," said CEO Robert Thomas in a conference call. "It does sometimes take a little time to digest those large quarter-over-quarter increases ... Sometimes after several quarters of consistently and significantly beating guidance, you just have to digest that a little."
For the first quarter ended in October, the Santa Clara, Calif.-based business reported net income of 12 cents a share, beating estimates of 9 cents a share. Revenue of $63.5 million came in 28% higher than a year earlier and in line with consensus.
TheStreet Ratings team rates Infoblox Inc as a Hold with a ratings score of C-. The team has this to say about its recommendation:
"We rate Infoblox Inc (BLOX) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."
- You can view the full analysis from the report here: BLOX Ratings Report