Stocks quoted in this article:
After the market closed yesterday, Cognex (CGNX - 26-3/16) alerted the media to a potential fourth quarter earnings shortfall. The company now expects to earn 36 cents per share versus the current consensus of 46 cents for the present quarter, although they still forecast 2000 to be a record year.
The market instantaneously and unemotionally discounts the negative impact of future lowered expectations, so after halting in after-hours activity for a period, the shares resumed trading after 6:00, reaching a low of 16-31/64. This morning they are still trading down 39 percent in pre-market activity. Robertson Stephens has now downgraded its rating on the stock from a "buy" to an "attractive."
CGNX's products are used to automate and assure quality control for a variety of discrete items.
The company attributed their lowered expectations to smaller and delayed orders from clients who manufacture capital equipment for the semiconductor industry.
The shares peaked at 73-1/8 in late March and then began a protracted decline, testing support in the 24-to-25 area. Option activity in the stock is practically non-existent, as even short sellers have all but abandoned it. The last peak of activity occurred in February 1999.