FIO missed on earnings after the bell today with $.04 a share on revenue of $118.1 mn vs consensus of $.07 on revenue of $110.8 mn, it sounds like another margin squeeze as revs were higher and EPS were nearly half of consensus.
The real trouble is in guidance as this is the most important part of earnings, guidance was for flat revenues were consensus expected a bump up to $125 mn.
As far as an earnings leak goes, I don't have evidence of that, what I would say I do have evidence of is a dramatic shift in the outlook for the company is a VERY short period of time, smart money isn't always right and they, just like anyone else, reserve the right to change their minds.
What stands out about FIO is not that there may have been an earnings leak, but that there was a massive re-evaluation of FIO and those who initially wanted in, wanted out as fast as possible and this would have been well before earnings for the quarter even started, someone knew there were big problems here.
Back in the summer, June-August, there was a decent size base put together, if you follow the red arrows tracking price you can see it's a "W" or double bottom. Whoever was accumulating was pretty aggressive in June and less so at the second bottom of July/August, but once your in a position that large (this is a 60 min chart), you have to see it through if you want out, you have to move it higher and have some demand to sell in to. Immediately on the first gap up off the base FIO was under heavy distribution, by the time the top hit it was deeply leading negative and well below the levels of the base, that happened fairly fast considering the size of the base and accumulation. I'm not even convinced they were able to get all the way out.
The 15 min chart has some more detail and shows the accumulation at the same two spots in June and July/August, again as soon as there was demand for FIO it was in a leading negative divergence and never once moved out of it.
This 10 min chart shows the second half of accumulation in July/August and distribution throughout, but an especially desperate move recently with that leading negative divergence, that divergence was formed in a spot where most of the action was down so the selling in to strength was abandoned and it looks like they sold in to anything with heavy volume days on the 18th, 19th and today the 24th.
The 2 min trend shows distribution at the top, but especially heavy leading negative distribution at the red box area, there was a short burst of strength.
I'd say this company was in trouble for some time and whoever bought it figured it out just about the time they finished buying it, talk about buyer's remorse.
FIO is down around 9% in After Hours trade
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