Why Unity Software Stock Glitched on Tuesday
Shares of Unity Software (NYSE: U), a maker of 3D virtualization software for the gaming industry, slid 6% through 10:30 a.m. ET Tuesday after reporting mixed earnings last night.
Analysts already weren't terribly optimistic heading into the company's fourth-quarter report Monday evening, expecting Unity to report sales of $562.7 million but a loss of $0.45 per share. As it tuned out, Unity exceeded expectations on sales, which came in at a strong $609.3 million. Losses, however, were much worse than feared -- $0.66 per share.
Unity's "revenue beat" wasn't quite as good as it seems, either. According to management, sales grew 35% year over year in Q4. However, this was entirely due to the fact that key customer Weta FX Unity transformed its service contract with Unity into a perpetual license agreement -- paying a fee of $99 million for this. Absent this windfall, Unity's revenue would have declined 2% in the quarter.
Source Fool.com
