August 29, 2018 / 5:08 AM / in 3 months

Cloud storage firm Box's shares fall on weak forecast

(Reuters) - Cloud storage provider Box Inc on Tuesday forecast current-quarter below analysts’ estimates, clouding a strong second-quarter beat and sending its shares down nearly 4 percent in extended trading.

FILE PHOTO: The logo of Box.net, an online file sharing and Cloud content management service for enterprise companies, is shown at its headquarters in Los Altos, California February 5, 2013. REUTERS/Robert Galbraith/File Photo

The company said the absence of a head for its Europe, the Middle East and Africa region took a toll on its operations.

“We were doing a search (for a new head of EMEA) for a number of months throughout the first half of the year,” Chief Executive Officer Aaron Levie said, adding that it affected Box’s ability to run its business smoothly.

The company named Chris Baker as the head of the region earlier this month.

For the third quarter, Box sees revenue between $154 million and $155 million while analysts were expecting $155 million, according to Thomson Reuters I/B/E/S.

The company expects an adjusted loss of 7 cents to 8 cents per share for the third quarter which analysts’ estimate a loss of 6 cents per share.

“We expect to have a non-GAAP profitability quarter in financial year 2019,” Levie told Reuters, adding that Box is currently in the best position it has ever been competitively.

Earlier this month, rival Dropbox Inc forecast third-quarter above Wall Street estimates, with the online storage firm earning more from a higher number of paying subscribers.

For the full-year 2019, Box forecast an adjusted loss of between 16 cents and 18 cents per share, while analysts, on average, were expecting a loss of 18 cents per share.

Box also raised the lower end of its full-year 2019 revenue forecast to $606 million from $603 million, keeping the higher end at $608 million.

The company, which also competes with Microsoft Corp’s OneDrive and Google’s Drive, had more than 87,000 paying customers in the quarter, up from 85,000 in the previous quarter.

Box’s second-quarter revenue topped Wall Street estimates, despite a rise in costs that the company has been incurring to attract new customers.

Net loss narrowed to $38.1 million, or 27 cents per share, in the second-quarter ended July 31 from $39.3 million, or 30 cents per share, a year earlier.

Excluding items, Box reported a loss of 5 cents per share, while analysts were expecting a loss of 6 cents per share.

Revenue rose 20.6 percent to $148.2 million, above estimates of $146.5 million.

Reporting by Akanksha Rana in Bengaluru; Editing by Shailesh Kuber

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