Compass Inc. shares plummeted in after-hours trading Monday, after the real-estate brokerage and tech provider slashed its annual revenue guidance and revealed plans to cut costs due to a downturn in the housing market. Compass
executives reduced their annual sales forecast by roughly $1.5 billion, with the current forecast calling for revenue of $6.15 billion to $6.45 billion after the previous guidance stated $7.6 billion to $8 billion. Executives also said they expect to seek $320 million in annually recurring costs for impending cuts.
“Given the challenges the real-estate market has faced so far this year and the likelihood that this difficult environment will continue for the foreseeable future, we are announcing a significant cost-reduction program,” Chief Executive Robert Reffkin said in a statement. “We have line of sight into each area that will drive these savings to our expenses, which we believe will enable us to be free-cash-flow positive in 2023. We expect to complete all targeted cost reductions by the end of this calendar year.” Compass stock plunged between 10% and 20% in after-hours trading immediately following the release of the results. Shares have already declined 48.5% so far this year, as the S&P 500 index
has dropped 10.2%. For the second quarter, Compass reported a net loss of $101.2 million, or 24 cents a share, up from a loss of 2 cents a share a year ago. Revenue increased to $2.02 billion from $1.95 billion a year ago, but missed expectations. …