Shares in Electronics For Imaging Inc (NASDAQ:EFII) plummeted Wednesday after the digital printing innovation company cut its outlook for the fourth quarter as businesses cut back on capital expenditure spending.
The Fremont, California, company forecast adjusted earnings of 45 cents to 47 cents a share on revenue of $255 million to $257 million. That's down from a previous forecast of 57 cents to 65 cents a share to $275 million to $285 million.
The current consensus earnings estimate is $0.66 per share on revenue of $287.5 million for the quarter ending December 31, 2018.
The stock tumbled 24.8% to $20.45 in premarket trading Wednesday.
Electronics for Imaging is a digital printing innovation company engaged in the transformation of printing, packaging, and ceramic tile decorative industries from the use of traditional analog-based presses to digital on-demand printing.
The company said it was impacted by “weakening economic conditions” experienced across its direct businesses, with customers delaying spend on capital equipment and software.
"Late in the quarter we began seeing a substantial shift in buying behavior versus the prior year in many of the industries we serve," said Electronics For Imaging CEO Bill Muir in a statement. "This was felt most significantly in the Americas. Customers became increasingly concerned about economic trends and many decided to defer capital expenditures until they had greater clarity on the economic environment."
The company said the brunt of its revenue shortfall was in its industrial inkjet business, which declined 6% year-over-year.
Electronics For Imaging also said its display graphics and building materials businesses were "expected to be weak in the quarter" but "were down more significantly than anticipated."
Contact Uttara Choudhury at [email protected]