ADT Inc. (NYSE: ADT) saw its stock plummet 5.03% in pre-market trading on Tuesday, despite reporting better-than-expected third-quarter earnings. The sharp decline suggests investors may be focusing on the company's updated guidance rather than the quarterly beat.
The security and automation solutions provider reported adjusted earnings of $0.23 per share for Q3, surpassing the analyst consensus estimate of $0.22. Revenue for the quarter came in at $1.298 billion, slightly above the expected $1.295 billion. Both figures showed improvement from the same period last year.
However, ADT's updated full-year guidance appears to be the likely catalyst for the stock's negative reaction. The company narrowed its 2025 adjusted EPS guidance to $0.85-$0.89 from the previous range of $0.81-$0.89. Additionally, ADT tightened its 2025 total revenue guidance to $5.08-$5.18 billion, compared to the prior outlook of $5.03-$5.23 billion.
The market's response indicates that investors may have been hoping for more robust guidance or were disappointed by the narrowed ranges. Despite ADT stating it is "on track to achieve full-year 2025 guidance metrics," the pre-market sell-off suggests Wall Street was expecting a more optimistic outlook given the Q3 performance.
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