C3.ai Stock Tumbles. It’s Another Blow to the AI Software Trade.

Heading into earnings, C3.ai stock was down 52% this year. (Dreamstime)

C3.ai stock was sinking after the artificial-intelligence software company’s outlook continued a recent pattern of disappointments.

The company reported an adjusted fiscal first-quarter loss of 37 cents a share on revenue of $70.3 million. That figure was roughly in line with preliminary results that C3.ai provided for the July quarter on Aug. 8. At the time, the company said that it expected revenue for the quarter to be between $70.2 million and $70.4 million, about 33% below its prior guidance.

But on Wednesday, C3.ai also provided a new outlook, forecasting second-quarter revenue of between $72 million and $80 million. Wall Street analysts had estimated $99.5 million.

Shares of C3.ai were down 13% in premarket trading on Thursday following the results. Heading into the earnings, the stock was down 52% this year.

“The bad news is that financial performance in Q1 was completely unacceptable,” Thomas Siebel, executive chairman and former CEO, said in the earnings release.

He added that there were possibly two reasons for the disappointing results. One reason is that the company had spent time over the course of the first quarter restructuring its global sales and services organization. Siebel said that the reorganization, with new sales and services leadership, had a disruptive effect.

C3.ai also said on July 24 that it had started to search for Siebel’s successor after the former CEO was diagnosed with an autoimmune disease that caused “significant visual impairment.”

Siebel said on Wednesday that his health problems prevented him from participating in the sales process “as actively as I have in the past.”

On Wednesday, the company said that Stephen Ehikian has been appointed as CEO, effective Monday. Ehikian most recently served as President Donald Trump’s appointee as acting administrator of the General Services Administration, C3.ai said.

“We expect Mr. Ehikian will need to reset expectations and
potentially lower guidance at some point,” wrote Oppenheimer analyst Timothy Horan in a research note.

Horan kept a Perform rating on the stock with no price target.

Write to Angela Palumbo at angela.palumbo@dowjones.com and Adam Clark at adam.clark@barrons.com