PC gaming company Corsair has preannounced some disappointing revenue numbers this afternoon. The company still plans to release its full earnings results on May 5, 2022, but a revenue miss of this size should be disclosed as fast as possible. Corsair now expects Q1 revenues to come in at $380 million versus Wall Street expectations of $460 million.
Here's Corsair CEO Andy Paul's full statement on the Q1 2022 preannouncement:
“We are pleased that our preliminary Q1 revenue increased 23% over the fiscal year first quarter prior to shelter at home, which was Q1 2020. This continues to demonstrate the long term growth for gaming products. We were also pleased to see continued gains in market share in many of our categories, which underscores our commitment to continued product innovation. We were not expecting to show growth over the most recent Q1 2021 since that quarter contained stimulus checks and pent-up demand due to product shortages. Having said that, our Q1 2022 revenue was lower than we expected, mainly due to a short-term slowdown in consumer spending in Europe. As is now becoming generally apparent, inflation is higher than expected and the Russia and Ukraine conflict has put a strain on consumer confidence. We are encouraged by many recent reports of GPU pricing falling and availability coming back to normal, and as we outlined in our investor day presentations, we expect that to result in a surge of self-built gaming PC activity in the second half of this year.”
It appears that Corsair believes there could be a decrease in consumer demand related to inflationary pressures. While Corsair says that it is seeing weakness in European demand, the Wall Street reaction to this news seems to signal fear of a global recession.
Corsair still plans on holding a proper conference call after their full Q1 2022 earnings results are posted on May 5, 2022, but today's revenue disclosure has rocked the stock. Corsair (CRSR) is down nearly 20% on the day.
What remains to be seen is if this Q1 2022 revenue miss is the beginning of a trend or just a speed bump for the PC gaming company. Some investors might appreciate this level of transparency, while others may just be fed up with the stock that is already down 68% from the all-time share price high set in 2020.
Corsair is known for making excellent components and parts for PC gamers, but the company also owns streaming device company Elgato, SCUF Gaming controllers, and ORIGIN PC. Many of these product lines are consumer-facing, so it appears that investors are spooked that there may be a recession coming in the PC space. The entire industry faces very tough comparisons to the wild pandemic demand for PC components and other accessories, but some of the bad news may be priced into CRSR shares.
This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon and risk tolerance, and consult with a financial advisor before acting on this information.
At the time of this article, Shacknews primary shareholder Asif A. Khan, his family members, or his company Virtue LLC had the following positions:
Long Corsair via CRSR shares
Long Corsair via CRSR call options
Asif Khan posted a new article, Corsair (CRSR) preannounces Q1 2022 revenue numbers below estimates
Huh slowdown in spend in Europe... Wonder if it's partly from Ukraine and ppl battening down?