ADT Corp., the provider of security services for residences and small businesses, tumbled the most in the Standard & Poor’s 500 Index after profit and sales trailed analysts’ estimates.
The shares plunged 17 percent to $31.40 at the close in New York, the biggest decline since the Boca Raton, Florida-based company’s 2012 spinoff from Tyco International Inc.
A 9.4 percent decline in new customers for the quarter ended Dec. 27 surprised investors who had long seen ADT as a relatively stable business, said Ian Zaffino, an analyst with Oppenheimer & Co. He said the company faces pressure from new home-security competitors such as AT&T Inc. and Comcast Corp.
“They’re taking away the lead generation from ADT,” Zaffino said in a telephone interview. Zaffino, who is based in New York, cut his rating on the shares earlier today to market perform from outperform.
Earnings excluding some costs were 43 cents a share and revenue was $839 million, missing analysts’ projections of 49 cents and $850.7 million, based on data compiled by Bloomberg. Net income for ADT’s fiscal first quarter fell 27 percent to $77 million.
Zaffino said part of the competitive pressure on ADT comes from the heavy television promotion of home-security services by Comcast, the largest U.S. cable company, and AT&T, the biggest U.S. phone company.
“Customer growth did not meet our expectations,” Chief Executive Officer Naren Gursahaney said in a statement. ADT is working to “regain subscriber traction in the future.”
Net income in the quarter was the lowest for any three-month period since ADT began reporting results separately following the spinoff from Tyco, according to data compiled by Bloomberg.