New Relic stock sinks as rumored acquisition target’s forecast disappoints
Summary
New Relic Inc. shares NEWR, sank more than 7% in after-hours trading Tuesday, after the software company that is reportedly considering acquisition bids disappointed with its forecasts. In an earnings report delivered after the bell, New Relic executives predicted fiscal first-quarter revenue of $238 million to $240 million and annual sales of $1.02 billion to $1.03 billion, which would be the company’s first billion-dollar annual revenue total. New Relic’s stock received a bounce last week, when a report said that private-equity firms were seeking to acquire the San Francisco company for $5 billion. No mention of a possible sale appeared in the company’s announcement Tuesday; executives were expected to speak in a conference call scheduled to begin at 5 p.m. Eastern time. Analysts on average expected adjusted earnings of 22 cents a share on sales of $241.1 million, according to FactSet.
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