Why Granite Construction's Shares Plunged
Feb 28th 2013 5:30PM
Updated Feb 28th 2013 6:00PM
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 contractor Granite Construction fell 11% today after the company reported earnings.
So what: Revenue fell 6%, to $504.8 million, way below the $600.2 million in revenue that analysts had expected. That, of course, hurt the bottom line, where net income was $18 million, or $0.46 per share, below the $0.53 estimate.
Now what: The revenue miss is the most troubling because construction spending is down in the company's markets. With shares trading at 27 times trailing earnings, investors are paying a lot for a company heading in the wrong direction. I'm going to pass on the discount today until we see some significant improvement in revenue.
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The article Why Granite Construction's Shares Plunged originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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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