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Impinj Plunges 20%: Street Quizzes CEO, CFO On Competition

Shares had been down 7% for the year, so far, before tonight’s report.

While keeping its outlook for how many “endpoints” will be equipped with Impinj’s wireless tags, at 7 to 7.2 billion this year, CEO Chris Diorio remarked that Impinj is seeing a “slight decrease in endpoint IC volumes in the second half of the year."

The Q4 outlook, for $28.25 million to $29.75 million in revenue, is below consensus for $35.4 million.

On a conference call with analyst tonight, CFO Evan Fein expended on Diorio’s remarks. He said "our fourth quarter outlook is impacted by a decline in endpoint IC demand as well as by insufficient reader and gateway inventory, with the latter causing us to push meaningful revenue into 2018."

One analyst, Charles Anderson, with Dougherty & Co., asked Diorio on the call how much of the lower outlook is because of pressure from competitors.

Said Diorio "We do see increasing endpoint IC pressure,” referring to chips that power the wireless reader functions of tags. "As a consequence of stiffened competition at a time of slower growth, and we expect some of that pressure to continue."

“But,” added Diorio, "we expect to continue driving our platform in a market, and as I said, next year, introducing new products that we believe will increase our competitive differentiation and as a market forward.”

Another analyst, Craig Hettenbach with Morgan Stanley, asked Diorio and Fein about an apparent slow-down in the retail industry. Retail has been seen as a big driver for Impinj, with the expectation for much of this year that the company would see contracts with Amazon (AMZN) as it integrates Whole Foods.

Fein said, rather cryptically, it is "about major projects that have moved out and push out of their current period."