EPS of $0.95 beat expectations of $0.906 and revenues of $2.03B slightly beat estimates of $2.02B. Sales declined 16.4% against the prior year, and it reported a net loss of $7.4M, a material decline against last year. Its results faced difficulties amid a decline in shipment volumes as it works on reducing network inventory levels. It guided EPS below estimates, and for Q2 it is expecting normalized EBITDA to be down about 25% compared to Q1. Its efforts to reduce network inventory levels are likely the right steps to support a resumption of growth once the market rebounds, but it is negatively impacting results in the short-term. The stock is down on the results today, and we feel the headwinds are likely to persist at least in the short to intermediate term. We like the stock as a long-term position, but volatility is likely to be sustained over the short-term. We would be OK with slowly averaging into this name, while assessing future earnings results.
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