The honeymoon has clearly ended for Matria Healthcare ( MATR).

Just months after its celebrated marriage to a competitor, Matria has crushed its fans with a disappointing outlook for the future. Notably, the disease-management firm has already lost out on one major contract it was counting on.

Matria managed to hit first-quarter target, but issued new guidance that has left investors worried about the rest of the year. The company is now forecasting far less growth in the second quarter than the market had been anticipating. It is then counting on major second-half improvements to lift its performance for the entire year.

Some clearly have their doubts.

"It's just clear as a bell to me that the stock market doesn't believe" the full-year guidance, one investor said during a conference call on Friday morning. "Can you give us something here to hang on to? This is painful."

The stock, indeed, suffered a major fall. The shares -- which peaked at $45 just two months ago -- plunged 14% to a nine-month low of $30.30 on Friday.

Bridging the Gap

Still, Matria's first-quarter results looked strong.

Revenue more than doubled to $80.9 million -- just topping the consensus estimate -- following the recent acquisition of CorSolutions. Meanwhile, earnings jumped more than eightfold to $12 million. Operating profits of 16 cents a share met the consensus estimate exactly.

However, Matria's second-quarter guidance fell well below analyst expectations. The company is forecasting second-quarter revenue of $82 million to $84 million instead of the $92.5 million Wall Street had anticipated. It is also looking for second-quarter profits of 16 cents to 19 cents a share -- which is a far cry from the current 28-cent consensus estimate.

Even so, Matria has simply tightened its full-year guidance to a range that -- at the high end -- still includes Wall Street's $1.20 target. To hit its goals, Matria must double its first-half earnings in the second half of the year.

"I know you want some additional comfort that we're not down here hallucinating in terms of what we expect to do," Matria CEO Parker Petit acknowledged during Friday's conference call. "It's very doable because of the huge operating leverage that comes with every new revenue dollar. ... We're comfortable. If we weren't, we would be so signaling."

Banking on Business

Still, Matria also felt pretty comfortable about landing a major contract that it failed to get in the end.

"It was a nice piece of business we would have liked," Petit explained. But "we came out on the short end of the stick ... (So) we've taken that out of our forecast."

Matria indicated that it had tried -- but failed -- to win that contract away from competitor Healthways ( HWAY). The company said that it had emerged as one of two finalists for the business, before losing out on the contract about 10 days ago. Meanwhile, it said that CorSolutions recently lost "a fairly substantial employer-type" account that has been eliminated from its forecasts as well.

On a positive note, Matria did portray its second-quarter guidance as conservative and hinted at possible upside in both the near and long term. The company then went on to ask for investors' trust in the meantime.

"We're going to get plenty of business," Petit promised. "It's just not visible to you yet."

Meanwhile, Petit attempted to shoot down any notion that short-sellers -- who have been betting against the stock -- might be right about the company.

"There have been so many inaccuracies in those short reports," he said. "I don't even know how they get that information."