Ashland Shares Dropped: What You Need to Know

Before you go, we thought you'd like these...
Before you go close icon

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 specialty chemicals maker Ashland (NYS: ASH) fell 10% today after releasing earnings.

So what: Revenue grew 22.5% to $1.85 billion in the quarter and topped estimates of $1.75 billion. Adjusted earnings per share also easily surpassed estimates at $1.01, but a $3.51 pension charge made the quarter a little less appealing.

Now what: Costs also jumped in the quarter, with cost of sales and administrative costs outpacing sales growth. The pension charge was due to an accounting change that used to be recorded once a year.

The quarter doesn't look as bad as the market thinks, and with shares trading at just nine times forward earnings estimates, I think this is a good time to jump in.

Interested in more info on Ashland? Add it to your watchlist byclicking here.

At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.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.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners