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Infloblox shares plunge on weak forecast

Infoblox Inc. shares plunged dramatically Tuesday after the network automation company lowered its revenue forecast due to weaker demand.

The Santa Clara, Calif.-based company said late Monday that it expects second-quarter revenue between $60 million and $61 million, down from its prior forecast of $65 million to $66 million. Analysts polled by FactSet had expected $65.7 million.

Company CEO and president Robert Thomas said that weaker sales in January, fewer big-ticket deals and softer federal business led to the revenue shortfall for the quarter.

Shares sank nearly 46 percent by midmorning.

Infoblox also said it anticipates adjusted earnings of 10 to 12 cents per share for its fiscal second quarter. Previously, it forecast 9 to 11 cents per share. Analysts had expected 10 cents per share.

The company also lowered its full-year forecast, saying it expects to earn 30 to 34 cents per share on revenue of $250 million to $254 million for the year. That compares with its earlier forecast of earnings of 44 to 54 cents per share on revenue of $270 million to $276 million.

Analysts had expected much better, forecasting earnings of 51 cents per share on revenue of $274.6 million for the year.

Sterne Agee analysts Alex Kurtz, Amelia Harris and Craig Jones said in a research note that after the second quarter of missed expectations, the guidance "raises too many questions about the core growth drivers of the business and our confidence in management's ability to predict their larger deal pipeline."

The analysts also said that the lack of a follow-up call with investors after the announcement creates the impression that the setback is a deeper issue than merely a few key deals slipping during the quarter.

Inflobox's shares were down $15.34 to $17.80 by midmorning and hit as low as $17.10 earlier in the day. That puts its shares at trading lows that they have not hit since 2012.

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