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What: Shares of Terex were collapsing today, falling as much as 16% after cutting its forecast for the quarter and full year.
So what: The construction-equipment maker appears to be falling in line with the industry, which is facing a lower demand across the market as the weak global economy has forced a delay in larger projects. Terex now says it expects earnings of just $0.50 to $0.60 a share, well below the analyst consensus at $0.82. In particular, management blamed weakness in the construction and material handling and port solutions segments. For 2013, it reduced EPS guidance to $1.90-$2.10 from a former range of $2.40-$2.70.
Now what: Like others in its industry, Terex said North American sales have improved but the European market continues to be a problem. While a drop in share prices seems warranted after such an announcement, there seems to be no long-term concerns here. Industry leaders like Caterpillar have made similar predictions, and it's fair to expect a recovery as the European economy gets better. Shareholders may have to wait longer than they wanted, but Terex and its peers should eventually bounce back.
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The article Why Terex Shares Tumbled originally appeared on Fool.com.Fool contributor Jeremy Bowman and The Motley Fool have no position in any 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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