Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let’s take a look at five dumb financial events this week that may make your head spin.
1. Scratching the Surface
Microsoft Corporation (NASDAQ:MSFT) finally came through with a long overdue price cut for its Surface RT tablet.
The Surface RT has been a retail disaster since hitting the market late last year. The move to slash the Windows RT-propelled tablet by $150 to as little as $350 is the right call, but Microsoft makes the cut for taking this long to price its struggling gadget aggressively.
It may now be too late for the Surface RT, in particular, and Windows RT, in general. If that sounds harsh, consider that Microsoft Corporation (NASDAQ:MSFT) took a $900-million charge for an inventory adjustment on the Windows RT tablets.
2. Death by denim
It had been a good run for luxury retailers until Joe’s Jeans Inc (NASDAQ:JOEZ) couldn’t leg it out in its latest quarter.
Shares of the wholesaler and retailer of premium denim plunged 21% on Tuesday after coming up short on the bottom line and checking in with half of the top-line growth that Wall Street was expecting.
Seeing net sales inch 8% higher may not seem all that bad, but Joe’s Jeans Inc (NASDAQ:JOEZ) has actually added eight new stores over the past year. Same-store sales fell 6% during the period, and that’s a sharp contrast to the many other upscale retailers that have been experiencing an uptick in business over the past year.
3. Solid state gets gaseous
Shares of OCZ Technology Group Inc. (NASDAQ:OCZ) slipped on Monday after the maker of solid-state drives and components offered up uninspiring preliminary financial results.
OCZ Technology Group Inc. (NASDAQ:OCZ) sees revenue of $50 million to $55 million for the quarter that ended in May, well below the $70 million that Wall Street was expecting.
OCZ Technology Group Inc. (NASDAQ:OCZ) blames the soft revenue on the tight supply of NAND flash, closing out the period with an order backlog of $23 million as a result of the supply constraints.
The silver lining here is that gross margins are improving, and even a pair of analysts who had no choice but to slash their revenue forecasts on OCZ Technology Group Inc. (NASDAQ:OCZ) actually boosted their earnings outlook. Then again, that’s not much of a silver lining until OCZ completes the restatement or prior financials and begins posting top-line growth again.
4. Liquidity event
Liquidity Services, Inc. (NASDAQ:LQDT) does a bang-up job offering online marketplaces for surplus and salvage assets, but investors were looking to liquidate the stock after it, too, hosed down its outlook.
Liquidity Services, Inc. (NASDAQ:LQDT) was originally forecasting as much as $275 million in gross merchandise volume for the quarter that ended last month, but now it’s bracing investors to expect between $228 million and $231 million in exchanges through its platform. Naturally, Liquidity Services is also scaling back its bottom-line target, eyeing net income of no more than $0.45 a share.
