Shares of Ambarella Inc. (NASDAQ: AMBA) took a hit in after-hours trading on Tuesday, as the video chip maker's third-quarter forecast fell significantly short of Wall Street expectations. The stock plunged by as much as 15% after hours, following a 4.5% gain during the regular session.
Weak Revenue Outlook
Based in Santa Clara, California, Ambarella forecasted revenue between $48 million and $52 million for the third quarter. This figure falls well below the FactSet consensus estimate of $67.9 million, disappointing analysts and investors alike. The company's second-quarter loss was reported to be $31.2 million, or 79 cents per share. In comparison, the year-ago period saw a loss of $23.7 million, or 62 cents per share.
Adjusted Loss and Decreased Revenue
Excluding stock-based compensation expenses and other items, Ambarella's adjusted loss for the second quarter came in at 15 cents per share, an improvement from the adjusted loss of 20 cents per share in the same period last year. However, revenue dropped to $62.1 million from $80.9 million in the year-ago quarter.
Since the beginning of the year, Ambarella shares have experienced a decline of 7.8%, in contrast to the S&P 500 index's year-to-date gain of 17.1% and the tech-heavy Nasdaq Composite Index's rally of 33.2%. Further analysis and market speculation will be necessary to determine how this disappointing forecast will affect the company's stock performance going forward.