Why Babcock & Wilcox's Shares Dropped
Nov 8th 2012 5:41PM
Updated Nov 8th 2012 5:44PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of energy service company Babcock & Wilcox (NYS: BWC) fell 11% today, after reporting earnings.
So what: Third quarter revenue rose 14%, to $807.6 million, but net income fell 11%, to $40.5 million, or $0.37 per share on an adjusted basis. Analysts expected revenue to be $830.3 million, and earnings of $0.44 per share.
Now what: Short term, this may have been an earnings miss but, long term, management is still confident in the company. It initiated a $0.08 quarterly dividend, and also authorized a $250 million share repurchase program. I'm not jumping on shares because of the declining profit but, at 11 times forward earnings, shares aren't trading at an unreasonable price.
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The article Why Babcock & Wilcox's Shares Dropped originally appeared on Fool.com.Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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