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Earnings Results: C3.ai stock plunges 22% after disappointing forecast

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C3.ai shares plummeted 20% in extended trading Wednesday after the software company’s executives guided for smaller revenue gains in the coming year than Wall Street expected.

C3.ai
AI,
-1.96%

executives forecast fiscal first-quarter revenue of $63 million to $67 million, and fiscal-year revenue of $308 million to $316 million in their fourth-quarter earnings report Wednesday afternoon. Analysts on average had been projecting first-quarter revenue of $71.6 million and annual sales of $333.9 million, according to FactSet.

That forecast suggests a sequential revenue decline from the fiscal fourth quarter and a steep growth decline in annual revenue. C3 reported fiscal fourth-quarter revenue of $72.3 million and annual sales of $252.8 million, which represents 38% growth from the previous year; the company’s forecast suggests revenue growth will decline to 25% or less in the coming year.

In Wednesday’s announcement, executives did not provide any reason for the expected decline in growth, instead focusing on fourth-quarter performance.

“Our strong fiscal-2022 performance further strengthens our position as a global leader in the Enterprise AI market and sets the stage for growth in fiscal 2023,” Chief Executive Thomas Siebel said in a statement.

The software company reported a loss of $58.2 million, or 55 cents a share, in the fourth quarter, worse than a loss of 24 cents a share a year ago. After adjusting for stock-based compensation and related taxes, C3 reported a loss of 21 cents a share, down from an adjusted loss of 15 cents a share a year ago.

Analysts on average were expecting an adjusted loss of 29 cents a share on sales of $71.3 million, according to FactSet.

C3 has struggled to maintain high stock prices commanded around its initial public offering, which took place in December 2020. Shares in the IPO were priced at $42 apiece, and they nearly tripled at times in their early days of public trading, but they have plunged since and closed Wednesday at $18.55. So far this year, the stock has declined 40.6%, as the S&P 500 index
SPX,
-0.75%

has fallen 13.3%.

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