Pivotal Software Falls By 28% on Subpar Earnings

Pivotal Software

Tuesday’s after-hours trading has been particularly active, with a number of companies seeing drastic, double-digit declines on poor news.

One of those companies was Pivotal Software , which saw its stock plummet 28.5 percent over a thirty-minute period after the markets closed. The main catalyst behind this decline was due to a disappointing first quarter financial results.

Pivotal Software saw its subscription revenue increase by 43 percent over the past year with a grand total of $128.9 million, while total revenue increased by 19 percent over the same time period.

Despite the increase in revenue, the company saw a net loss of $31.7 million in the first quarter of 2019, a slight decrease from the same time last year which saw a net loss of $32.5 million.

Analysts polled by FactSet had initially been expecting quarterly sales to be in the $184 million range with annual revenue around $803 million for the year, a figure that doesn’t seem likely to happen anymore. Before today’s announcement, analysts were still a little bullish on the stock overall, with one analyst giving a “strong buy” rating, four giving a “buy,” while six issued a “hold” rating for the stock. No analysts had any sort of a “sell” rating for the company. However, this could possibly change in the next 24 hours as experts revise their predictions for the company.

“We had a solid start to the year with 43% subscription growth and customer expansions continued to fuel our strong net expansion rate of 143%. However, sales execution and a complex technology landscape impacted the quarter,” said Rob Mee, CEO of Pivotal Software. “We have taken steps to improve our execution, and remain confident in our strategy and market opportunity for the long term. Pivotal continues to be the best partner for organizations that want to modernize their most important applications.”

One small piece of good news that happened to come out today for Pivotal was that one hedge fund, Washington Capital Management, had increased its holdings in Pivotal by 25.9 percent during the first quarter according to a form filed with the SEC. The investment remains small, however, worth just $486,000 according to the filing and wasn’t enough to really move stock prices.

After falling 28.5 percent in after-hours trading, Pivotal Software reached a price of $13.27 per share. This is the lowest price point the company has ever seen since going public, with the previous lowest price being $14.43.

Pivotal Software is competing alongside GameStop (NYSE: GME) for the biggest losers of the day, which also plunged around 30 percent on poor financial results. The difference, however, was that GameStop reported declines in almost every area of their financial report, with no redeeming factors. Pivotal at least saw its revenues increase, so at least there is a silver lining their, albeit a small one.

Pivotal Software Company Profile

Pivotal Software Inc provides a cloud-native platform, It accelerates and streamlines software development by reducing the complexity of building, deploying and operating new cloud-native applications and modernizing legacy applications.

The company generates its revenue from subscription and services. Generating, a majority revenue from the services. Geographically, it generates a majority of its revenue from the United States. – Warrior Trading News