What Happened
Shares of Computer Networks Stock Arista Networks (NYSE: ANET) took a hit on Friday, falling 24.2% before the market closed.
The stock withdrew despite solid results in the third quarter. The culprit for bearish against the stock on Friday was management's fourth-quarter guidance.
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So what
Arista Networks reported revenue of $ 654 million, up 7.6% from the previous year. Adjusted earnings per share for the tech stock was $ 2.69, up from $ 2.1
"In Q3 2019, we continued to see the adoption of our cloud network technology in more diverse environments," said Arista CEO Jayshree Ullal in the revenue release. But Ullal said the company expects "a sudden softening in the fourth quarter with a specific cloud titan customer …"
Now what
Analysts believe "cloud titan" is Facebook . In Arista's notice, Ullal said that one of the largest customers recently informed Arista that it would not follow up on large orders Arista was expecting.
"Of course, this kind of volatility has a sudden and serious impact on our Q4 guidance," Ullal said during the interview.
Arista advised for fourth quarter revenue between $ 540 million and $ 560 million. Analysts expected revenue for the period to be $ 686 million.
