Boston, MA 08/13/2014 (wallstreetpr) – MagicJack VocalTec Ltd (NASDAQ:CALL) stock slid the most since January by 5.82% to close the day at $12.29 as Wall Street got tough with the company reducing its full year earnings estimates. The company had in intraday slid by highs of 15% after lowering its revenue estimate from an earlier given estimate of $163 million to $120 million. The reduction of the full year estimates follows the company posting lower than expected sales for the second quarter of $29.5 million compared to consensus estimates of $32.1 million according to Bloomberg.
MagicJack Turnaround Plan
MagicJack VocalTec Ltd (NASDAQ:CALL)’s CEO and president looks to have admitted that they performed below par in the second-quarter after stating that the company was marking a transition period. The CEO during the conference call reiterated that the company was initiating a turnaround plan that should enable it return to growth. Much work remains ahead for the company as it plans to start generating revenues from the release of international calling features of its App.
MagicJack VocalTec Ltd (NASDAQ:CALL) provider of voice-over-internet protocol has consistently worked on monetizing its apps by essentially restricting some features for its users although it expects a deal in some of these initiatives as well as the launch of new magicJack. The company has consequently lowered its full year sales to $120 million from an initially given margin of between $158 and $168 million.
Impact of Increased Competition
Revenue decline in this case has been attributed to a delay in the launch of majicJackGo as well as the impact of the decline of sales of magicJack Plus. The company has been on a downward trend having retreated by 17.7% over the past one year; revenue has also been shrinking since 2009. Increased competition from the likes of Viber, WeChat and FaceTime has considerably affected the company’s market share.
MagicJack VocalTec Ltd (NASDAQ:CALL) has now initiated a turnaround plan expected to comprehensively reposition the company’s services as well as make substantial improvement on the renewal rates care as well as voice quality.
