Mueller Industries Shares Dropped: What You Need to Know

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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 copper tubing manufacturer Mueller Industries (NYS: MLI) got a pipe to the head from investors today, falling as much as 17% in intraday trading after the company reported third-quarter results.

So what: For the quarter, Mueller's net sales were up 16% from last year, to $586 million, topping the average analyst estimate of $571 million. Profitability, however, was hurt by higher costs, including a 20% increase in the cost of sales and a 19% jump in selling, general, and administrative spending. As a result, earnings per share fell 46% from last year. Excluding a pre-tax charge due to the falling price of copper, per-share profit was $0.39, well short of the $0.69 that Wall Street was expecting.

Now what: While lower copper prices had a detrimental effect on Mueller's third-quarter bottom line, if the price for the metal doesn't spike back up, that would be good news for the company. Meanwhile, with Mueller's results leveraged primarily to residential and commercial construction, investors will definitely require patience as those markets continue to try to find firmer footing in the wake of the real estate meltdown.

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At the time this article was published 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.Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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