NEW YORK, Dec. 20, 2019 (GLOBE NEWSWIRE) -- Labaton Sucharow LLP (“Labaton Sucharow”) announces that on December 20, 2019, it filed a securities class action lawsuit, captioned Frampton Living Trust v. Resideo Technologies, Inc., No. 19-cv-3133 (D. Minn.) (the “Action”), on behalf of its client Frampton Living Trust against Resideo Technologies, Inc. (NYSE: REZI) (“Resideo” or the “Company”), and certain officers and directors (collectively, “Defendants”). The Action is brought on behalf of all persons or entities that purchased shares of Resideo’s common stock between October 10, 2018 and October 22, 2019, inclusive (the “Class Period”), pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rule 10b-5, promulgated thereunder.
Resideo is a global provider of products, software, solutions, and technologies that help homeowners stay connected and in control of their comfort, security, and energy use. The Company also provides home heating, ventilation and air conditioning controls, security solutions, and is a distributor of security and low-voltage electronics products. The Company was formed through a spin-off from Honeywell International Inc. (“Honeywell”).
The Action alleges that throughout the Class Period, Defendants made materially false and misleading statements and/or omissions concerning Resideo’s business and financial condition, including its forecasted financial results. Specifically, the Action alleges that Defendants failed to disclose the following true facts, which were known to Defendants or recklessly disregarded by them: (i) the negative effects of the spin-off were more substantial and persistent than disclosed and had negatively affected the Company’s sales, supply chain, and gross margins; (ii) Resideo faced serious competition for its products, including competition from Honeywell; and (iii) as a result of the foregoing, the Company’s financial guidance lacked a reasonable basis and the Company was not on track to make its 2019 guidance as claimed.
The truth about the issues plaguing Resideo was revealed through a series of disclosures, culminating with the material reduction of the Company’s long-reaffirmed 2019 guidance.
First, on March 7, 2019, Resideo issued its financial results for the fourth quarter and full-year 2018. On this date, the Company also announced that it was lowering its 2019 financial forecasts. The Company further revealed that the profitability of certain business segments had been impacted by costs related to the spin-off. This disappointing news caused Resideo shares to decline by over 23 percent on March 7, 2019.
Second, on August 7, 2019, after the close of trading, Resideo issued its financial results for the second quarter of 2019, disclosing that the Company’s earnings had come in below estimates. The following day, on the Company’s pre-market earnings call with analysts and investors, Defendants further revealed that Resideo was experiencing margin pressures due to product mix headwinds, including the sale of lower margin devices. On this news, the Company’s share price declined by 2.4 percent from its opening price. As the market continued to digest the disappointing news, Resideo common stock further declined by approximately 3.7 percent on August 9, 2019, and declined by approximately 5.2 percent the following trading day on August 12, 2019.
After the close of trading on October 22, 2019, Resideo released preliminary financial results for the third quarter, and surprised investors by announcing earnings that significantly missed estimates. The Company also materially reduced its earnings guidance for 2019. The drivers of these disappointing results were the lower sales of thermostats and the performance of the RTS business. That same day, the Company announced the abrupt resignation of the Company’s Chief Financial Officer. In response to these disclosures, the price of Resideo stock declined by over 37 percent.
If you purchased Resideo common stock during the Class Period, and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the United States District Court for the District of Minnesota no later than January 7, 2020. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in the Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in the Action.
If you would like to consider serving as Lead Plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at fmcconville@labaton.com.
Frampton Living Trust is represented by Labaton Sucharow, which represents many of the largest pension funds in the United States and internationally with combined assets under management of more than $2 trillion. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, and Washington, D.C. More information about Labaton Sucharow is available at www.labaton.com.
You can view a copy of the complaint here.