Shares of Boingo Wireless Inc. fell sharply in after-hours trading Wednesday after the operator of Wi-Fi hotspots provided guidance for the current quarter that was below Wall Street expectations The company also announced an acquisition.
After the markets closed, the Los Angeles company said it expected third-quarter revenue to be in the range of $25.5 million to $26.5 million, with earnings in the range of 5 cents to 6 cents a share. The Wall Street consensus was for revenue of $28.9 million and earnings of 8 cents a share.
For the second quarter, Boingo reported 15 percent higher net income of $1.5 million (4 cents a share), compared with $1.3 million (5 cents) in the same period a year earlier. There were fewer shares outstanding a year earlier. Revenue rose 6 percent to $24.3 million.
Earlier in the day, Boingo announced that it had acquired Cloud Nine Media, a San Francisco start-up that sells advertisements to help cover the cost of offering Wi-Fi in public places such as airports and restaurants. Terms of the deal were not disclosed.
“As we’ve expanded our Wi-Fi services into new venue categories, the demand for sponsored access and location-based advertising services has grown in parallel,” said Chief Executive David Hagan. “Cloud Nine Media brings a formidable portfolio of tools and talent that will help us take our execution to the next level.”
Shares earlier closed down 51 cents, or 5 percent, to $9 on the Nasdaq, and were down 16 percent in after-hours trading.