RingCentral Inc. experienced a significant drop of more than 6% in share value during the extended session on Tuesday. While the cloud-based communications company's fourth-quarter earnings generally met Wall Street's expectations, the sales guidance for both the year and the current quarter fell short.

Fourth Quarter Performance

In the fourth quarter, RingCentral reported a loss of $47 million, equivalent to 50 cents per share, compared to a loss of $284 million, or $2.97 per share, in the previous year. Adjusted for one-time items, the company earned 86 cents per share. Revenue for the quarter increased to $571 million, up from $525 million in the same period last year.

Market Expectations

Analysts anticipated that RingCentral would post adjusted earnings of 82 cents per share on sales of $570.4 million. However, the company's guidance for revenue between $2.370 billion and $2.395 billion for 2024--an 8% to 9% growth--led to an adjusted EPS projection of $3.50 to $3.58.

Future Outlook

For the first quarter, RingCentral expects revenue to fall between $575 million and $580 million, with an annual growth rate of 8% to 9%. Earnings per share are forecasted to be between 79 cents and 80 cents. Analysts surveyed by FactSet predict first-quarter revenue of $581 million, and adjusted EPS of 82 cents.

Looking ahead to the full year, analysts forecast revenue of $2.4 billion and an adjusted EPS of $3.51.

Market Performance

Over the past 12 months, RingCentral shares have declined approximately 17%, in contrast to the S&P 500 index's 22% gains during the same period.

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