Altium Limited drops 8% on sales update: Here's why

In morning trade, shares of electronics design software provider Altium Limited (ASX:ALU) have fallen over 8% despite a rather promising 2Q announcement.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Slightly before midday shares in electronics design software provider, Altium Limited (ASX: ALU) were trading as much as 8% lower following the announcement of its quarterly sales and revenue.

Despite the market's reaction, much of the news contained within the release was quite positive.

Reporting in US dollars, compared to the prior corresponding period, revenue for the second quarter jumped 23% on a constant currency basis whilst sales rose 10%.

The latest results cap off a good half-year performance for the growing technology company, with overall revenues and sales for first half of financial year (FY) 2015 rising 21% and 12%, respectively.

Perhaps the part of the announcement which spooked the market was management's commentary.

Altium Chief Financial Officer, Richard Leon, said, "Challenging economic conditions in Europe and the weakening of the Euro against the USD have created some headwind for Altium to contend with for the remainder of FY15."

Last financial year Altium's EMEA (Europe, Middle East and Africa) operating division accounted for approximately 41% of revenue, up from 37% a year earlier.

"Notwithstanding this, Altium delivered strong revenue growth in the second quarter and for the half year of 17% in both instances. We continue to remain confident that our full year performance with be consistent with our expectations." Mr Leon said.

Operating cash flow was up 17% for the half. Total cash on the balance sheet stood at $US59.1 million as at 31 December 2014.

Motley Fool Contributor Owen Raszkiewicz owns shares of Altium. You can follow Owen on Twitter @ASXinvest.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »