Cognex (CGNX) shares plunged 6.76% in pre-market trading on Thursday, despite reporting better-than-expected third-quarter results. The sharp decline suggests investors are focusing on the company's fourth-quarter guidance, which appears to have fallen short of market expectations.
The machine vision systems manufacturer announced fiscal Q3 adjusted earnings of $0.33 per diluted share, surpassing both the previous year's $0.20 and analysts' expectations of $0.29. Revenue for the quarter also beat estimates, coming in at $276.9 million, up from $234.7 million a year earlier and above the $261.8 million forecast by analysts.
However, Cognex's outlook for the fourth quarter seems to have dampened investor enthusiasm. The company expects Q4 adjusted earnings to be between $0.19 and $0.24 per share on revenue of $230 million to $245 million. While this guidance is in line with analysts' expectations of $0.22 per share on revenue of $236.9 million, it represents a sequential decline from Q3 performance. This projected downturn in both earnings and revenue for Q4 appears to be the primary driver behind the stock's significant pre-market drop, as investors reassess the company's near-term growth prospects.