Disappointing revenue outlook dings Zagg sharesJuly 17, 2013 @ 5:57 am
(AP) - Mobile device accessory maker Zagg Inc. disappointed investors with its announcement that sales will be less than Wall Street analysts had expected.
Shares slid nearly 14 percent in premarket trading Wednesday, to $5.05. The stock had already dropped 20 percent this year.
The company said late Tuesday that it expects revenue of $51 million in the second quarter, compared with the $57.5 million predicted by analysts polled by FactSet. The company blamed the lack of major device launches, slower-than-expected retail distribution expansion and softness in Europe. The company makes screen protectors, keyboards, and other add-ons for mobile phones and tablets.
"We worry that Zagg's fortunes may be overly tied to Apple's new product launches," said Roth analyst Dave King in a note Wednesday. He said he does not see any big positive drivers for the stock in the near term.
Janney Capital Markets analyst David Strasser wrote that Zagg has two key issues. One is that it's between new product launches from Apple and other big mobile device makers. Zagg will be helped if Apple releases something new later this year, he wrote.
But he said Zagg is also suffering from execution problems, and the company's CEO needs to "dramatically revamp the sales force and the international sales strategy."
Zagg reports its full second-quarter results on Aug. 1.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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