SeaChange International (SEAC) Changes into Less Profitable Company

Jacob Harper |

“Transformative multi-screen video service” provider SeaChange International (SEAC) reported 2014 third fiscal quarter earnings after the bell on Dec. 5, and the company posted less than expected revenue and earnings, and significantly lowered guidance, which sent the company’s shares into a downward spiral.

Lack of Demand Appears to Limit SEAC's Potential

Founded in 1993, SeaChange claims to provide “world-class services” to bridge the gap between video, mobile, and the internet. While the multifaceted business model has served the company well in the past, SeaChange has struggled for some time to live up to their name.

After touching $70 a share during the tech bubble in the late 90s, SeaChange had lingered under $10 for most of thee aughts. Despite a major uptick in September fueled by strong second quarter earnings and a bevy of bullish analyst reports, those gains were largely erased in the aftermath of the dismal third quarter report.



Though SeaChange's business model appears to be at the forefront of tech, merging disparate platforms and providing multi-interface solutions, consumer demand does not appear to be matching the company's promise.

SEAC Q3 Earnings, Guidance Disappoint Street

For their 2014 third fiscal quarter earnings report, SeaChange reported a net gain of $2.9 million, or $0.09 per share, identical to the net gain of $2.9 million, or $0.09 per share, from the same period a year ago. Revenue for the quarter was $37.77 million, as compared to $39.2 million from the same quarter the previous year. Analysts were expecting a net gain of $0.14 per share on revenues of $41.8 million.

More than the disappointing earnings and revenue, however, investors seemed most upset after SeaChange’s conference call with investors. In the call, CFO Anthony Dias revealed EPS estimates for the fourth fiscal quarter were between 15 and 20 cents a share, “growth (that) is more moderate than prior expectations,” and was below analyst expectations.

SeaChange’s stock plummeted on the pessimistic forecast. Shares fell 15.76 percent on midday to hit $12.13 a share. The stock fell some 13 percent in extended trading after the results.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
SEAC SeaChange International Inc. 2.44 -0.04 -1.61 38,149 Trade
DSUS Drone Services USA 0.00 0.00 0.00 0

Comments

Emerging Growth

Goldrea Resources Corp.

Goldrea Resources Corp is engaged in the acquisition, exploration and development of mineral properties located in North America.

Private Markets

Santo Diablo Mezcal

Santo Diablo Mezcal has been created to capitalize on a boom sector of the beverage market currently full of many small unmemorable products by producing one sexy, household, easily recognizable…

Mesa-Marshall 2 Well Project

MESA Resources ("MESA") is sponsoring the development of the two well direct drilling project -- "Mesa-Marshall #1-2". MESA, founded in 1992, is engaged in the acquisition, exploration and development of…