*By Kavitha Shastry*
Shares of Sonos dropped as much as 20 percent Tuesday after the smart speaker maker said revenues fell 6 percent in its latest quarter, and losses nearly doubled to $27 million.
It was the company's first earnings report since its highly-anticipated IPO in early August.
Losses can often be exaggerated in the quarter a company goes public due to adviser fees and compensation for employees whose options vest in the offering, but Sonos did see weakness in a couple areas ー sales of components fell more than 4 percent and revenue from home theater speakers fell 20 percent to $66.7 million. The company forecast revenue for its fiscal year ending in September at about $1.1 billion, about 12 percent higher than in 2017.
But that kind of growth didn't appear to satisfy investors who'd driven the stock price up 40 percent through Monday's close. Tuesday's declines more than erased the gains at the start of the week and brought shares to their lowest level in more than three weeks ー significant for a company that's only been public for a little over a month.
CEO Patrick Spence attributed the revenue decline in its latest quarter to elevated sales from a year ago, when Sonos launched its Playbase audio streaming device. The report did not include results from the Sonos Beam, a $400 soundbar that launched in July.
Spence said in a letter to shareholders that the home market remains a top priority for the company, but Sonos has no shortage of competition from the likes of the Amazon Echo, Google Home, and Apple Home Pod. It even faces the risk that Amazon, whose Alexa technology is integrated with its Sonos One, could end that relationship at any time.
Sonos shares started trading on the Nasdaq on August 2 after pricing at $15 in its IPO.
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The Congressional Budget Office said Friday it expects inflation to nearly hit the Federal Reserve's 2% target rate in 2024, as overall growth is expected to slow and unemployment is expected to rise into 2025, according to updated economic projections for the next two years.
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Stocks fell after the opening bell Friday but will end on another positive week.
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Americans picked up their spending from October to November as the unofficial holiday season kicked off, underscoring that shoppers still have power to keep buying.
The average long-term U.S. mortgage rate dropped below 7% to its lowest level since early August, another boost for prospective homebuyers who have largely been held back by sharply higher borrowing costs and heightened competition for relatively few homes for sale.
Mortgage rates have dropped below 7% for the first time since the middle of August.
