Boston, MA 02/27/2014 (wallstreetpr) – UTi Worldwide Inc. (NASDAQ:UTIW) received the wrath of the market after announcing weak guidance for its fourth quarter raising concerns over its future performance. The Company now expects to report a quarter net loss of between $0.33 and $0.38 against consensus estimate of a profit of $0.06. The chain service and solutions expects revenue for the quarter to come in, between $1.05 and $1.10 billion compared to revenue estimates of $1.12 billion.
Reasons behind the weak guidance
The freight forwarder has cited that its inability to comply with some financial covenants was the reason behind the sudden change in the anticipated performance. The company as a result of the weak guidance slipped to a low of $10.74 was also its lowest closing price since 2009 with a market value of $1.13 billion. This also marks the company’s largest dip since its November 2009 initial public offering.
The change in guidance is in contrast to UTi Worldwide Inc. (NASDAQ:UTIW)’s positive results that it reported in December 5, 2013 in which earnings per share met consensus estimates of $0.08 at the back of total revenue of $1.15 billion. The company is currently rated as a “hold” by TheStreet awaiting its outcome in the market in the coming days, RBC capital on the other hand have upgraded the company’s stock from a perform rating to an “outerperform”.
UTi Worldwide private offering of convertible Notes
UTi Worldwide Inc. (NASDAQ:UTIW) has also announced plans to issue $350 million worth of its senior convertible Notes that are due in 2019 in a private offering. The offering is subject to market and other conditions with the company also planning to offer an additional $50 million. The proceeds from the offering will be used for the repayment of the company’s debt as well as other general corporate purposes.
The weak guidance seem to have had a bad toil on UTi Worldwide Inc. (NASDAQ:UTIW)’s stock as it slipped by 29.62 to close the day at lows of $10.74
