RadiSys Corporation (NASDAQ:RSYS)
Yesterday RadiSys Corporation (NASDAQ:RSYS) reported a loss of $7.6 million in its second quarter or (-$0.19) per share. Adjusted for amortization and restructuring the loss came in at (-$0.06) per share. Results beat the analyst’s consensus estimate for a (-$0.12) loss per share. Revenues came in line with analyst expectations but the stock price suffered on news that the revenues from the company’s largest customer will be excluded from guidance figures. Volumes are heavy and on pace to trade thirteen times their daily average. RSYS stock chart:
Going forward, RadiSys Corporation (NASDAQ:RSYS) is expecting Q3 revenues between $26 – $30 million. Annual revenue is now expected between $130 million to $140 million. The revised revenue range is based on an uncertain future for revenues from RadiSys Corporation (NASDAQ:RSYS)’s
largest customer, and does not include any new DCEngine orders from this customer for the remainder of the year. Additionally, any material commercial revenue from the existing proof-of-concepts and trials ongoing across the Company’s strategic product lines would represent additional revenue not reflected in the revised guidance range. This uncertainty is weighing heavily on the firm’s stock price.
Brian Bronson, Radisys President and Chief Executive Officer stated in the company’s press release “Based on recent discussions with our largest customer, we are revising our full-year revenue expectations to exclude any new product orders from this customer as they now expect orders to resume in 2018.”
The news is another set-back for shareholders of RadiSys Corporation (NASDAQ:RSYS). RSYS stock price had underperformed badly. Shares are down over 45% YTD, and down over 48% for the year. Shareholders likely are experiencing frustration as EPS, while not showing a profit, has, in fact, been losing money at a smaller rate each year. Additionally there was an uptick in sales from 2015 when the company posted a figure of $184.6 million to $212.4 million for 2016. One bright spot is that the Relative Strength Index for RSYS stock is under 15 which indicates a stock in a heavily oversold position.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.