What caused FTEK's Q1 earnings to fall short?

FTEK's Q1 earnings fell short due to a combination of factors: 1. **Revenue Decline**: The most significant factor contributing to the earnings shortfall was a substantial decline in revenue. FTEK's revenue for the quarter was $10.2 million, a decrease of approximately 30% from the same period the previous year. 2. **Cost of Goods Sold (COGS) Increase**: Despite the revenue decline, the cost of goods sold increased. This was primarily due to higher raw material costs, which had a negative impact on the company's gross margin. FTEK's gross margin for the quarter was 34.4%, a decrease from the 37.2% recorded in the same period the previous year. 3. **Operating Expenses**: FTEK's operating expenses also contributed to the earnings shortfall. The company incurred higher expenses related to research and development, sales and marketing, and general and administrative activities. These increased expenses were a result of strategic initiatives aimed at long-term growth, which temporarily impacted short-term profitability. 4. **Foreign Exchange Losses**: The company incurred foreign exchange losses due to the strengthening of the US dollar against the Indian rupee. This had a negative effect on FTEK's net income, as the company conducts a significant portion of its operations in India and reports its financial statements in US dollars. In summary, FTEK's Q1 earnings fell short primarily due to a combination of revenue decline, increased cost of goods sold, higher operating expenses, and foreign exchange losses.