NEW YORK (TheStreet) -- For all the talk about how management of certain companies will lowball guidance just to beat those expectations, some companies just can't seem to set the bar low enough. And that seems to be the case for cardiovascular imaging company Volcano Corp. (VOLC), which just can't seem to beat its own shadow, much less defeat the likes of Boston Scientific (BSX) and St. Jude (STJ). But this hasn't been due to a lack of effort.
Volcano's top executives have never been shy about how great they believe their company is. Nor have they ever gone the "conservative route" with respect to future growth targets. The problem has been the execution. And these bold visions -- as much as I appreciate them -- have never manifested into meaningful results.
Consequently, investors have grown frustrated, sending the stock lower by 17% year to date due to (among other things) slowing growth and compressing margins. Complicating matters even more, is that investment fund Engaged Capital, which owns a 5% stake in Volcano, has taken the activism route, trying to force the company's hand to enact a share buyback worth an estimated $200 million. But following another disappointing quarter, it's anyone's guess when Volcano shares will ever erupt -- as attractive as they may appear.
Ahead of the earnings release, Volcano management had warned that the third quarter was going to be another disappointment. As noted, this has become a trend. Not only did this imply the company's sixth earnings miss out of the last seven quarters, but management also pointed to weaker-than-expected fiscal 2014, which immediately sent the stock plummeting 22%. But there were also some particulars in the report that pointed to an ominous future.