Weaker Volumes Hurt Liquidity Services

Liquidity Services (NASDAQ: LQDT) aims to offer bargains to shoppers by obtaining unwanted inventory from government and business clients and selling it at a profit. That business model had a lot of promise during the late 2000s and early 2010s, when the economy was emerging from recession and low-priced goods were a necessity for consumers. More recently, though, Liquidity Services has struggled as key contracts from the U.S. Department of Defense have diminished in scope. The company has had to respond with aggressive measures to seek new growth opportunities.

Coming into Thursday's fiscal third-quarter financial report, Liquidity Services investors were prepared to see sales declines and red ink on the bottom line. Revenue plunged far further than most had expected, but net losses weren't quite as bad as feared, and that inspired some hope among those who watch Liquidity Services. Let's look more closely at what the surplus specialist said and whether its results are likely to improve in the near future.

Image source: Liquidity Services.

Source: Fool.com