Shares in Kornit Digital (NASDAQ:KRNT) tanked in New York 17% to US$14.23 in the wake of a profit warning it published for the third quarter.
The Israeli based printer maker cited delays in deliveries to a single customer, unprepared to receive such a large number of systems, due to prolonged unanticipated delays in getting regulatory permits.
The market reckons that customer is tech giant Amazon(NASDAQ:AMZN). When Kornit got the deal with Amazon is sent shares surging.
In January, it said that following purchases by Amazon, it has been selected to deliver a large number of on-demand textile production systems in support of its Merch by Amazon program.
“Customer demand for graphic t-shirts offered through Merch by Amazon continues to grow rapidly, and more developers and content creators join the service every day,” director Miguel Roque, of Merch by Amazon had said at the time.
But the delay has caused a steep drop in Kornit's expected third quarter revenue, down to a range of US$27 to 28.5 million, from a previous forecast of US$34 to 38 mln.
In the same quarter of 2016, the firm made US$30.9mln.
Citigroup downgraded its rating on the stock to 'neutral' from 'buy'.