A cut converts a one-quarter disappointment into a multi-quarter repricing, since every forward estimate and therefore the forward-pe has to move. Shares often fall further on the cut than on the accompanying result.
Cuts also tend to cluster. A management team that has misjudged demand once frequently does so again, which is why the first cut in a cycle is rarely the last.
Example: Northwind Tools cuts full-year guidance from $0.98 to $0.88 citing distributor destocking. Shares fall 16%, and the following quarter brings a second cut to $0.82.
Related: guidance, guidance-raise, earnings-miss, estimate-revision, pre-announcement