Investing.com - Cloud-based content management company Box sank Thursday after it posted revenue and guidance that fell short of expectations.
Box (NYSE:BOX) reported fourth-quarter earnings of 6 cents a share, well above estimates from Investing.com for earnings of 2 cents a share. But revenue of $163.7 million fell short of estimates for $164.17 million. Its shares plunged 20%.
The company blamed the mixed results on weaker-than-expected billings generated for its subscription services in the fourth quarter, driven by "underperformance in Europe, the Middle East and Asia. and longer sales cycles for some seven-figure deals."
Despite some "encouraging metrics," such as an increase in deals worth more than $100,000, the numbers show that Box's "focus on strategic selling has yet to yield gains," Morgan Stanley said in a note to clients.
Box grew billings 16%, but that was below the Morgan Stanley (NYSE:MS)'s anticipated 26%.
Billings growth for the current-quarter is expected to remain challenged as the company guided in the low single-digit range. In 2020, however, growth rates are expected to normalize.
KeyBanc Capital Markets downgraded its rating on Box to sector weight from overweight.
For the first quarter, Box expects revenue of $161 million to $162 million on losses in a range of $0.06 to $0.05 a share, below estimates for a $0.01 loss a share on revenue of $169.81 million.