Razorfish shares fall sharply in after-hours trading
The Internet consulting company's shares fall in after-hours activity after the company warns that fourth-quarter earnings will not meet Wall Street expectations.
Excluding certain charges, Razorfish expects to post a pro forma net loss of 17 cents to 22 cents a share. On that basis, Wall Street predicted the company would post a per-share profit of 2 cents a share, the consensus estimate of 12 analysts surveyed by First Call/Thomson Financial.
In after-market trading, the New York-based company's shares fell $1.09, or 35 percent, to $2, making it the largest percentage loser on the Nasdaq. During regular trading, Razorfish rose 53 cents to $3.09.
The company attributed the shortfall to "macroeconomic trends" that have caused a slowdown in technology spending. Razorfish also said that consulting projects have become larger and more complex, which has stretched sales cycles and crimped cash flow.
"The market for our services has changed dramatically, and we underestimated the magnitude of this shift," CEO Jeff Dachis said in a statement released after the markets closed. "As a result, we overestimated the visibility of our pipeline and our performance expectations."