Language training software maker Rosetta Stone Inc cut its third-quarter earnings outlook and scrapped a proposed stock offering barely a week after announcing it, sending shares down more than 25 percent.
The company, which went public April this year, cited higher-than-expected operating expenses as the reason for the cut in outlook.
Rosetta Stone, cut its third-quarter adjusted net income to 25 cents to 27 cents a share from its prior forecast of 33 cents to 35 cents a share.
The company, however, maintained its third-quarter revenue forecast of $64.5 million to $66.5 million.
Analysts expect the company to earn 32 cents a share, before items, on revenue of $65.7 million, according to Reuters Estimates.
The company said it had incurred higher sales and marketing and product development expenses during the current quarter as it looks to launch advanced levels for four languages before the holiday season.
The company also cut its full-year adjusted earnings outlook to $1.14 to $1.18 per share from $1.22 to $1.26 per share it forecast last month. Analysts expect $1.02 per share.
On Aug 10, the company had said certain stockholders would be selling about 4 million shares in a public offering -- representing a fifth of the company's public float.
Rosetta Stone shares had finished up 40 percent on the first day of trading, making it the strongest debut in nearly a year.
Shares of Rosetta Stone fell to their lowest after the April listing. They were trading down $7.18 at $21.20 in morning trading on the New York Stock Exchange.
(Reporting by Manasi Phadke in Bangalore; Editing by Saumyadeb Chakrabarty)