Echo Therapeutics (NSDQ:ECTE) suffered a brief Wall Street dip in the immediate aftermath of its 2nd-quarter earnings report, in which the company posted a 27% decrease in sales and a 6% deepening of losses, but still beat analysts’ earnings estimates by more than 40%.
Overall the company posted losses of $3.3 million, or 51¢ per share, on earnings of $22.6 million during the 3 months ended June 30. That compared with losses of $3.2 million, or 81¢ per share, on sales of $30.9 million during the same period last year.
The losses, though deeper than last year, still beat out analysts’ consensus estimates by almost 20¢. On average Wall Street analysts had estimated that Echo’s 2nd quarter would result in per-share losses of 73¢.
Nonetheless, the financial report wasn’t met with much praise. Released on August 8, after the close of the market, Echo’s 2nd-quarter financials preceded a 1-day 7.5% drop. from $2.66 to $2.46, in ECTE shares on August 9. Shares clambered back up over the weekend to open at $2.48 Monday morning and closed at $2.64 Monday night.
The initial sell-off may have also been spurred by the announcement that a group of shareholders had filed a lawsuit against Echo and its officers, accusing the company of misleading investors and causing a 2011 plunge in stock prices by faking a $20 million financing round, Law360.com reported.
"Seeking to abate this stock price decline and to also enable the company to complete a successful public offering of its stock, certain individual defendants orchestrated a scheme to present the illusion of the company having obtained a solid financial backing," according to the shareholder complaint.
ECTE shares had gained another 7.3% in after-hours trading as of about 5:45 p.m. last night.